S. 2153: Open App Markets Act

The Open App Markets Act is a proposed piece of legislation aimed at promoting competition in the app economy and reducing the influence of certain large technology companies, often referred to as "gatekeepers." Here are the key components of the bill, broken down for understanding:

Promoting Competition

The bill establishes rules to foster competition among app stores and developers, particularly those operated by large technology companies that have significant control over the app market. The goals include:

• Increasing consumer choice
• Improving app quality
• Reducing costs for users

Definitions

Several important terms are defined in the bill:

• App: A software application that users can run on their devices.
• App store: A platform for distributing apps, open to third-party developers.
• Covered company: Any business that operates an app store with over 50 million monthly users.
• Developer: Individuals or entities that create apps or manage app stores.
• In-app payment system: A mechanism within an app for processing payments.
• Nonpublic business information: Private data from developers or their apps that is not public knowledge.

Key Provisions

The act includes multiple provisions aimed at ensuring fair practices:

Exclusivity and Tying

Interference with Developer Communications

Covered companies are prohibited from restricting how developers communicate with app users regarding offers, pricing, and services.

Use of Nonpublic Business Information

A company must not use confidential information from a third-party app to create competitive offerings.

Interoperability

Companies must enable users to choose third-party apps or app stores as defaults and allow installations from outside their app stores.

Self-Preferencing in App Store

Companies cannot unfairly rank their own apps higher than competitors' apps in app store search results.

Accessibility for Developers

User Security and Privacy

Covered companies can take necessary actions to protect user privacy and security, including:

Enforcement

The bill outlines enforcement methods by federal and state authorities, including:

Reporting Requirements

After three years of enactment, an in-depth analysis of the legislation's effects on competition and market power will be required from federal agencies.

Miscellaneous Provisions

The act does not limit the authority of the FTC or state attorneys general under current antitrust laws, nor does it require companies to warranty damages caused by third-party apps.

Effective Date

The act would come into effect 180 days after its passage.

Relevant Companies

• AAPL - Apple Inc.: The company operates the App Store and may need to alter its payment processing and app distribution practices under the new regulations.
• GOOGL - Alphabet Inc. (Google): As the operator of the Google Play Store, it would have to comply with new rules regarding developer treatment and payment systems.
• MSFT - Microsoft Corporation: Its app distribution through the Microsoft Store could be affected, requiring changes to its policies governed under this act.