App Store Freedom Act
The App Store Freedom Act would require large app-store owners and their underlying operating systems to allow greater competition and openness in the app marketplace. It mandates interoperability and open development so consumers can select third-party app stores or apps by default, install third-party apps outside a company’s own store, and hide pre-installed apps. It also requires covered companies to provide developers with access to the operating system interfaces and features they generally control, along with necessary documentation. The bill bans certain exclusive practices (such as mandating in-app payments or parity pricing) and prohibits using nonpublic business information to compete against a developer’s app. Enforcement would be carried out by the FTC (with potential penalties) and state attorneys general, and the act would preempt conflicting state laws to the extent they govern the prohibited conduct, while preserving other state laws. The act would take effect only after the FTC issues implementing guidance within 180 days of enactment.
Key Points
- 1Interoperability requirements for large app-store owners: Users must be able to set a third-party app or app store as default, install third-party apps outside the company’s store, and remove or hide the company’s pre-installed apps or those of partners.
- 2Open app development: Covered companies must provide timely, free access to OS interfaces, hardware, and software features to developers, along with sufficient documentation to use them, on terms comparable to those the company offers to itself or its partners.
- 3Prohibitions on exclusivity and tying: Companies cannot force use of their in-app payment systems or demand pricing/terms that favor their own platform over alternatives; cannot punish developers who sell outside their store or offer non-owned third-party apps via remote services rather than downloads.
- 4Restrictions on misinformation and data use: Companies cannot restrict or surcharge legitimate business communications between developers and users about offers or terms of sale; cannot use nonpublic business information to compete with an app.
- 5Enforcement and penalties: FTC enforcement with penalties up to $1,000,000 per violation; states can sue on residents’ behalf but the FTC can intervene; the act includes coordination between federal and state authorities.
- 6State law and scope: States cannot prohibit conduct required by the act or mandate actions prohibited by it, but the act preserves essential protections in areas like contracts, torts, unfair competition, and certain data/privacy/fraud rules.
- 7Definitions and scope: A “covered company” is one that owns or controls an app store with US users over 100 million and the OS on which that store runs. This targets the largest platform owners and their ecosystems.
- 8Effective date: The act becomes effective only after the FTC issues formal guidance within 180 days of enactment.