Option A: a digital market with only one payment processor and means to pay (Apple iOS)
Option B: a digital market where any merchant can build a preferred payment processor (what a new US bill wants).
A new US bill wants to break the duopoly of the Google Android store and Apple iOS store. Among others, it wants to give people the opportunity to setup their own payment systems within these ecosystems: “The legislation applies to companies that own or control an App Store with more than 50 million users, and it would prohibit Apple from forcing developers to use its own in-app purchase system, allowing developers to distribute apps through alternative app stores.”
On Wednesday, a new bipartisan antitrust legislation that targets Apple’s App Store and Google’s Play Store was introduced by three U.S. Congress members, in a first attempt to change how app stores are dominated by Google and Apple operate.
US Senators Richard Blumenthal (D-Conn.), Marsha Blackburn (R-Tenn.), and Amy Klobuchar (D-Minn.) introduced their Open App Markets Act.
“Google and Apple have gatekeeper control of the two dominant mobile operating systems and their app stores that allow them to exclusively dictate the terms of the app market, inhibiting competition and restricting consumer choice,” the lawmakers said.
I have checked Google and Apple stocks and the bill did not influence markets. In other words, investors did not see the new rules as a threat. If you force Apple to provide access, it can do so if that becomes the law but it can put a notice “this seller processes payments outside Apple” – a critical warning that may even affect the reputation of the merchant within the ecosystem.
This is not new. Amazon lists items after search and tells you the items which are fulfilled by Amazon. Typically, if prices are relatively the same, many buy from the items which are under the control of Amazon, instead of dealing with merchants they do not know. If Apple does not provide the confidence on the payment system, many will stop spending.
Yet, there needs to be a balance on the fees but Congress must be very careful not to legislate out what makes people use these apps – security of payment in trusted platforms- in the age when cyber related issues have ballooned.
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