As the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law (ACAL) renews its antitrust work in the opening months of the 117th Congress, the first hearing out of the gate helps define some of the issues important to ACT | The App Association member companies. The hearing, titled “Reviving Competition, Part 1: Proposals to Address Gatekeeper Power and Lower Barriers to Entry Online,” zeroed in on policy proposals aimed at software platforms in particular. The ideas are especially consequential for app developers because software platforms are the app store / operating system combination that our member companies leverage to reach their clients and consumers. And they are distinct from social media platforms (like Facebook and Twitter), retail platforms (like the Amazon marketplace), and search / advertising platforms (like the Google search engine).

At least one witness highlighted a proposal in ACAL’s Antitrust Report from last year to adopt a nondiscrimination regime. While it may sound like a pro-small business proposal at first, a set of nondiscrimination regulations on software platforms would degrade competition and likely marginalize App Association members.

First, a nondiscrimination regime would insert a federal agency between app development companies and software platforms in a way that helps the largest developers to the detriment of smaller app companies. Under current circumstances, one-person developer shops routinely work directly with the platforms to resolve disputes. A nondiscrimination regime like the Program Carriage rules at the Federal Communications Commission (FCC) would require platforms to focus primarily on challenges (or credible threats to bring challenges) through that formal, federal process. This system would even further elevate the largest companies selling products and services on software platforms, while marginalizing the concerns of App Association members. If the Program Carriage rules are any indication, challenging software platform conduct in such a tribunal would be costly, requiring a company to retain counsel to babysit a petition for months or years. App Association member companies are generally not able to retain lawyers or lobbyists in DC, so for them, a mechanism like this is just another way for Epic or Spotify to try and avoid their obligations to pay for the developer services from which all developers benefit. In fact, those companies could potentially challenge Apple’s Small Business Program because it is only available for the smallest app makers and could be said to advantage Apple’s own offerings by charging only larger companies more. This may not be an intended use of a nondiscrimination regime but serves to illustrate that it is mainly a handout to the complainants already petitioning through the press.

Second, a nondiscrimination regime is not a great fit because the relevant developer services market is competitive. Software platforms are not standard-essential technology or otherwise created as a public commons, nor do their owners have monopolies over the markets in which they compete. We’ve heard commenters refer to multiple competitors in a single market as “monopolies,” which is kind of like calling your band “The Lone Rangers.” These companies invest substantially in their respective platforms and compete vigorously with each other to provide better developer services. The Antitrust Report claims the app stores don’t compete for consumers, but it doesn’t address the market for developer services, and in that market the platforms are plainly trying to outdo one another. The most recent example of that competition is Apple’s Small Business Program, which reduces the App Store commission to 15 percent for developers making $1 million or less per year through the platform. If competition exists—and it does in this case—it’s far preferable and better suited to producing the optimal outcomes for developers and consumers than a set of rules that locks the platforms in place via compliance.

Third, not only do the app stores compete with each other for developers, they also compete with each other for consumers. Consumers commonly switch between Apple and Google devices, and the costs of doing so are not prohibitive. During last week’s hearing, one witness commented that consumers will not want to switch out an expensive device because a single app is not available on the platform they currently use. Maybe so, but consumers do switch platforms all the time if not because of the availability of a single app, then for the overarching differences between devices, operating systems, and app stores. The two platforms are competitively differentiated, with Google’s open model—allowing software outside the Google Play store to be downloaded—versus Apple’s App Store exclusivity. Add to this the competition from videogame platforms like Epic and Xbox—and even the open internet and progressive web apps—as partial substitutes and the market is broader and more competitive than at first blush.

Lastly, a nondiscrimination regime would force homogeneity in a developer services and app store markets that currently are differentiated. For example, removing a software platform’s ability to object to a product or service on privacy grounds would force the platform to allow apps and devices that fail to meet high privacy standards, subordinating privacy to variety. The current market, meanwhile, allows one platform to prioritize privacy while another prioritizes variety. For example, when Tile and Apple hit a bump in the road, Google not only responded by accepting Tile on its platform but engaged in a robust integration with the device. If all platforms follow the open model, developers lose the option of a more privacy protective and exclusive marketplace.