H.R. 3209: App Store Freedom Act

This bill, known as the App Store Freedom Act, aims to create a more competitive environment in the app marketplace by implementing various regulations and requirements for companies that own app stores and operating systems. The key provisions of the bill are summarized below:

1. Short Title

The bill is referred to as the App Store Freedom Act.

2. Protecting a Competitive App Market

Requirements

Covered companies, which own app stores and the operating systems they run on, are required to:

• Allow users to choose third-party app stores and apps as defaults.
• Facilitate the installation of third-party apps and stores without restrictions.
• Permit users to delete or hide pre-installed apps or app stores.

Covered companies must also provide app developers access to operating system features and documentation without charging fees, ensuring equal access compared to their own apps.

Prohibitions

Under this bill, covered companies are prohibited from:

• Requiring developers to use their own in-app payment systems or offer better terms on their platforms than others.
• Punishing developers for using other payment systems or for offering different pricing in rival app stores.
• Interfering with communication between app developers and users regarding business offers and terms.
• Using nonpublic business information gathered from their app stores to compete with those developers.

3. Enforcement

Federal Trade Commission (FTC) Enforcement

The FTC will enforce this act as if it were part of the Federal Trade Commission Act, with similar powers and penalties. A violation of the bill may result in fines of up to $1,000,000 for each incident.

State Enforcement

State attorneys general can file civil actions on behalf of residents if they believe a violation has occurred. They must notify the FTC before proceeding, but can take action immediately in certain cases.

4. Effect on State Law

No state laws can contradict or impose stricter requirements than those established by this bill regarding app marketplace practices.

5. Definitions

The bill defines key terms, including:

• App: A software application that runs on devices.
• App Store: A platform for distributing apps from third-party developers.
• Covered Company: Any entity that operates an app store with over 100 million users and its associated operating system.
• Developer: An individual or entity that creates apps or operates an app store.

6. Guidance and Effective Date

The FTC is required to issue guidelines to help companies comply with the new regulations within 180 days of the bill's passage. The act takes effect once those guidelines are released.

Relevant Companies

• AAPL (Apple Inc.): As the owner of the iOS operating system and App Store, Apple's practices regarding app distribution and payment systems will be directly affected by this legislation.
• MSFT (Microsoft Corporation): With its Microsoft Store on Windows devices, this bill could impact how Microsoft manages third-party apps and payment methods.
• GOOGL (Alphabet Inc.): Google's Play Store is also encompassed by this bill, affecting how Android handles app installations and in-app purchases.