The Competition Commission has ordered Apple and Google to give prominence to local apps in the South African versions of their app stores.
This is one of the key remediation actions the commission plans to enforce on the two US technology giants and forms part of its broader final report into online intermediation platforms, released on Monday. The commission has also proposed far-reaching interventions that will impact companies such as Takealot, Google, Amazon.com and Booking.com.
The commission said the business model of global app stores – the Google Play store and the Apple App Store – “limits the visibility of local app developers”, making it impossible for them to go toe to toe against “well-resourced” global competitors.
“Google and Apple must also provide a curation of South African apps on their app stores and advertising credits to South African app developers,” the commission said in its report.
The commission found that international apps are favoured over local ones in search results inside the app stores. To help make local apps easier to find, the commission has declared that app stores must “curate” local results by placing them in a “carousel” that makes these results more visible.
“Curation is where store editors identify quality apps and promote them through a wide variety of means such as featured apps, category recommendations, new apps, classics, apps of the day, etc. Google and Apple must also provide a South African curation of apps on their app stores and advertising credits to South African app developers,” the commission said.
Another matter relating to app stores on the commission’s radar concerns “anti-steering” policies that prevent app developers from redirecting users away from the stores to their own website to pay for purchases. This has been a big focus for competition regulators in other jurisdictions.
Alternatives to app stores
“Where discovery of the app takes place through the application store, consumers will be ignorant of alternative payment options, limiting their discovery and use. The anti-steering [policies] restrict competition from alternative payment methods for the app available through other channels. The result is high commission fees that are likely to raise the pricing of apps to the detriment of consumers,” said the report.
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The commission’s remedial prescription is that Google and Apple must allow apps to direct consumers to alternative payment channels outside their app stores. The commission was influenced in this regard by the EU’s Digital Markets Act, and it said adherence to the European legislation will be considered as compliance with its remedial actions. – © 2023 NewsCentral Media
