Comments to the National Telecommunications Information Administration Regarding Competition in the Mobile App Ecosystem
On July 9, 2021, President Biden signed the Executive Order on Promoting Competition which, among other recommendations, requested at Section 5(r)(iii) that the Secretary of Commerce to “not later than 1 year after the date of this order, in consultation with the Attorney General and the Chair of the Federal Trade Commission, conduct a study, including by conducting an open and transparent stakeholder consultation process, of the mobile application ecosystem, and submit a report to the Chair of the White House Competition Council, regarding findings and recommendations for improving competition, reducing barriers to entry, and maximizing user benefit with respect to the ecosystem.”
As a preliminary remark, the fact-finding goal of the Request for Comment (RFC) to understand the level of competition in the mobile app market is laudable. But it raises questions about why the Biden administration has already endorsed the S.2170 Open App Markets Act bill which is premised on the assumption that this market lacks competition. Consequently, it is regrettable that the Biden administration supports a bill based on the belief of a lack of competition, while simultaneously acknowledging through this RFC the lack of knowledge about the level of competition in this market.
The Biden administration should withdraw its support of S.2710 at least until the NTIA provides evidence of alleged anticompetitive conduct in a failing mobile apps market through its study. Until then, support for the S.2710 is rushed and undermines the effectiveness of the fact-finding exercise carried out by the NTIA via its RFC.
In these comments, we first discuss the competition which exists in the mobile app market. The dynamism of competition contradicts the widespread belief that an app store duopoly (i.e., Apple App Store and Google Play Store) reveals a lack of competition. We then discuss the potential antitrust concerns arising out of the characteristics of the mobile app markets rather than from anticompetitive motives.