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App developers are caught in Big Tech’s ‘Squid Game’

Only Congress can help ensure level playing field against Apple, Google

There’s nothing smaller app developers can do about Apple and Google’s monopoly over app stores without action from Capitol Hill, Thayer writes.
There’s nothing smaller app developers can do about Apple and Google’s monopoly over app stores without action from Capitol Hill, Thayer writes. (Jakub Porzycki/NurPhoto via Getty Images file photo)

Lately, app stores have functioned more like a contest in Netflix’s “Squid Game” than a fair marketplace. In other words, developers must play by Big Tech’s rules or get “eliminated” from their app stores.

App developers are, in effect, limited to using two companies — Apple and Google — if they want to bring their apps to market. Both companies control nearly 99.64 percent of app stores in the United States. So if Apple and Google deny or remove an app, it spells death for that app company. 

Additionally, most developers don’t forge complaints in fear of Google or Apple retaliating against them, either by removing their app or imposing harsher restrictions. As Ida Tin, the CEO of the health app Clue, put it, “You don’t want to annoy the milkman when you only have one milkman.” So as of now, it’s Apple and Google’s game, and there’s nothing developers can realistically do about it without action from Capitol Hill.

These dominant platforms know they sit in a dual position with outside app developers, as both platform providers and direct competitors, and they take full advantage of it.

For example, Apple allows its AirTags — keychain devices to help consumers find lost items — access to its iPhone’s ultra-wideband detection capabilities while not permitting third-party competitors to do so. This put lost-item tracker app Tile at a significant disadvantage because it had to operate with far more degraded data to provide the same service as Apple’s homegrown service. Worse, Apple inundated its iPhone users with a disingenuous pop-up ad campaign against Tile. Apple claimed that Tile surreptitiously tracks its users in a way that AirTags did not, which was untrue. 

Google and Apple’s dominant position even allows them to steal core functions from the third-party apps they host, as if taking a 30 percent commission wasn’t enough. Apple is so notorious for this behavior that developers have coined a term for it, “Sherlocking.” The term dates back to 2001, when Apple incorporated several features from a third-party app, aptly named Watson, into its desktop search tool called Sherlock. Apple neither asked the developer’s permission nor offered any compensation for its use. When Watson developer Dan Wood confronted Steve Jobs about it, Jobs’ position was that “this is our market,” and we can take it if we want it.

Here’s how getting Sherlocked looks like today: Apple monitors a third-party app’s performance in its App Store, then the giant copies the smaller app by incorporating its functionality into an existing Apple app (usually through an update). This allows Apple to be the sole or primary provider or user of that function. Additionally, once an app is duplicated, Apple’s version is usually the only one that benefits from the new modification. 

Apple and Google claim their restrictions are needed to ensure their customers’ safety and privacy when using their smartphones. However, Apple degrades many of its privacy and cyber protocols in mainland China and even shares its customers’ sensitive information with app companies working with the Chinese government. Google has a penchant for disregarding or circumventing consumers’ privacy settings on its Android devices. The facts simply do not support Big Tech’s rationale here.

There are a few bipartisan proposals in Congress to help level the playing field for smaller developers. The bicameral Open App Markets Act would provide small-business developers with the appropriate leverage to challenge large app store platforms’ contractual terms that promote anticompetitive practices, like Sherlocking. The legislation has a clear path to passage and would be meaningful to developers across the globe. Also, on the House side, the American Choice and Innovation Online Act would prevent app stores from using their dominant position to deter competition. 

In short, Congress is the most likely vessel to turn Apple and Google’s app stores from a “Squid Game” into an equitable and competitive marketplace. It’s certainly a binge-worthy cause.

Joel Thayer is the president of the Digital Progress Institute, a nonprofit seeking to bridge the policy divide between telecom and tech through bipartisan consensus.

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