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White House calls Apple and Google 'harmful' in bid to cut app store fees

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The National Telecommunications and Information Administration wants Apple and Google to be forced to have third-party app stores, saying that as-is, the model inflates prices and reduces innovation.

As Apple prepares to raise App Store prices outside the US, the NTIA says that Apple and Google's business model "is harmful to consumers and developers."

Following an investigation, then NTIA says it has found that the current "mobile app store model has provided a range of benefits to both app developers and users, but has also created conditions of competition that are suboptimal."

"The policies that Apple and Google have in place... have created unnecessary barriers and costs for app developers," says the NTIA's full report, "ranging from fees for access to functional restrictions that favor some apps over others."

The Executive Branch claims that "in some areas, such as in-app payments, it is unclear how the current system benefits anyone other than Apple and Google."

It argues that "given the growing importance of this ecosystem to our economy," and also to the people of the United States, Congress should "pursue measures... to open the ecosystem to greater competition."

Google already allows sideloading of apps from alternative sources, but Apple has protested against it. The NTIA acknowledges Apple's position, but points out that others disagree.

"While Apple and Google provide reasons why some measures might be in place, such as the benefits to users in increased security and privacy protections, and to developers in terms of access to markets and development tools," it says, "many commenters challenge the technical necessities of these choices and question whether other models could provide similar if not greater benefit."

During the investigation, Apple filed a comprehensive account of its reasoning for its App Store rules. Those reasons concentrated on Apple's privacy stance plus how the company believes it has helped around 20 million app developers reach customers.

"Apple believes in vibrant and competitive markets and through the App Store," an Apple spokesperson told AppleInsider, "we've helped millions of developers around the world turn their brightest ideas into apps that change the world."

"Today, third party apps are among the most popular on the App Store, contributing to a robust app economy that includes millions of apps and supports hundreds of thousands of US jobs," continued the spokesperson. "We appreciate the report acknowledges the importance of user privacy, data security and user convenience."

"Nevertheless, we respectfully disagree with a number of conclusions reached in the report, which ignore the investments we make in innovation, privacy and security," said Apple, "all of which contribute to why users love iPhone and create a level playing field for small developers to compete on a safe and trusted platform."

The new report comes after President Biden's op-ed in the Wall Street Journal, calling for more bipartisan efforts against Big Tech firms and their use of users' personal data.

Updated 07:50 with comments from Apple.