This second interim report under the five-year Digital Platform Services Inquiry looks at the competition and consumer issues associated with the distribution of mobile apps to users of smartphones and other mobile devices. This report focuses on the two key app marketplaces used in Australia: the Apple App Store (the App Store) and the Google Play Store (the Play Store). These two app marketplaces dominate mobile app distribution in Australia, with minimal use by Australians of rival app marketplaces and other alternatives.

The ACCC’s examination of the operation of the Apple App Store and the Google Play Store in Australia has identified a number of significant issues which warrant attention. These include: the market power of each of Apple and Google; the terms of access to app marketplaces for app developers, including payment arrangements; the effectiveness of self-regulation, including arrangements to deal with harmful apps and consumer complaints; and concerns with alleged self-preferencing and the use of data. These issues affect competition with potentially significant impacts for both app developers and consumers.

A key area of focus for this report is the concerns raised with the ACCC that Apple and Google’s ability to set and enforce the rules governing access to the App Store and the Play Store can harm competition and negatively impact app developers and/or consumers. This is an area where the ACCC considers more can be done by Apple and Google, including in order to meet expectations that they should not leverage their market power, and the access they have to commercial information, to advantage themselves to the disadvantage of rival apps. This report identifies, as potential measures, those steps that could be undertaken by Apple and Google; however, regulation may be required if they fail to do so. The ACCC notes that a number of jurisdictions have already, or are proposing to, put in place rules governing the conduct of digital platforms which meet certain thresholds.

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