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Apple Labels ACCC App Store Proposals As “Draconian”

In response to the ACCC proposals that would require them to open their app store to third-parties, Apple have labelled the Australian watchdogs as “draconian”. The tech giant have also stated that the ACCC proposals are “not articulated with cogent evidence”.

The ACCC are due to make a submission to the treasury in October, regarding a new regulatory framework that makes things better for the consumer and promotes competition in a market that is currently controlled by US tech giants. The ACCC believe that the Competition and Consumer Act and Australian Consumer Law are not up to date and cannot keep up with the fast-developing digital platforms.

Apple require third-parties to pay 15-30% of in-app transactions, a practice that many call controlling and as Elon Musk states, “a defacto global tax on the internet.”

The ACCC believe that the control that Apple, Google and other tech giants have over digital platform competition is harmful to consumers and prevents the establishment of new competitors.

Many companies who use Apples App Store and similar online platforms are calling for reform that would prevent the enforcement of the fee, and the ability for apps to process transactions outside of the major tech companies online stores.

Fortnite Developer Epic are one such company, and have argued that some or all of the 15-30% fee end up being the burden of the consumer.

Epic is currently in legal battles with Apple and Google over the fee, after they were called out for bypassing both app stores and the transaction charge. As a result, their apps were removed from both stores.

Credit: Andrew Harrer | Bloomberg | Getty Images

Afterpay have also called for a new code of conduct, stating that “A code could establish clear standards of acceptable conduct and prohibit anti-competitive strategies and tactics that could lead to poor market, business and consumer outcomes,”

“This would support a transparent and open marketplace for third-parties, fintechs and other innovative businesses operating in markets dominated by digital platforms and provide more avenues for redress in circumstances when platform signatories allegedly engage in anti-competitive conduct.”

Alongside this, the ACCC have suggested that tech giants should be required to share data with third parties, a move that Apple is highly against.

Apple is puzzled that the competition and consumer protection agency would prioritise purported competition concerns which lack cogent evidence of harm, over clear and present severe damage to users that they experience every day,” said the tech giants legal team. “… the regulatory interventions proposed … would fundamentally change the iPhone and related Apple services in what is an already highly competitive market.”

The ACCC on the other hand, believe that “digital platforms with substantial market power are able to leverage network effects and ­barriers to entry to build scale and protect themselves from ­competition.”

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