09/17/2020

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App Developers Form Advocacy Group



The Coalition for App Fairness

App companies have banded together to put pressure on Apple (AAPL) and other app marketplaces to make changes to their policies. The new group, called The Coalition for App Fairness, is a nonprofit registered in Washington, D.C. Its members include Epic Games (the maker of Fortnite), Match Group (MTCH) (which owns Tinder), Spotify (SPOT), and others.

App marketplaces have become one of the main ways consumers access entertainment, educational materials, business tools, and more. App stores account for billions of dollars worth of economic activity each year. The new coalition wants to make sure that app stores policies are fair to app developers and that companies like Apple and Google (GOOGL) don’t abuse their power.

A Quick Review

The conflict between app developers and app marketplaces has been simmering for some time. Earlier this summer, Epic Games found a way to allow consumers to make purchases within Fortnite without paying the 30% cut that Apple and Google usually take from in-app purchases. In response, Apple and Google removed Fortnite from their app stores. Epic Games then sued the companies, and the lawsuit is currently unfolding in a California federal court.

There have been other disputes between app developers and the platforms that distribute their apps in recent months. Apple in particular faced criticism from tech companies like Microsoft (MSFT) and Facebook (FB). Additionally, a coalition of media companies including the New York Times (NYT) and the Wall Street Journal recently sent a letter to Apple asking for better app store terms.

Looking Ahead

The coalition of app developers is focusing on three main areas that it hopes to change: It is criticizing app stores’ policies of taking a 30% cut of in-app purchases, it wants to stop platforms from engaging in what it sees as anticompetitive behavior, and it wants to make sure that these platforms, especially Apple, do not use their power to favor their own services on their app stores. App marketplaces have defended themselves, saying they encourage competition and that the fees they charge cover security and other services.

Investors have been carefully watching as both businesses and lawmakers scrutinize Apple and Google’s app store policies this summer. They will be eager to see what actions The Coalition for App Fairness will take, and how that will impact the companies’ policies.


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