Brief:

• Spotify, "Fortnite" creator Epic Games and Tinder owner Match Group created an advocacy group called the Coalition for App Fairness (CAF) to push Apple and other app store gatekeepers to change their rules on how apps can operate, per an announcement.
• Basecamp, Blix, Blockchain.com, Deezer, the European Publishers Council, News Media Europe, Prepear, Protonmail, SkyDemon and Tile are also among the founding members of the nonprofit coalition, which is based in Washington, DC.
• CAF said most app stores collect excessive fees and unfairly hinder competition by favoring their own products and services The coalition published a list of 10 App Store Principles it wants operators of app stores to adopt. The principles include rules like "no developer should be required to pay unfair, unreasonable or discriminatory fees" and "a developer's data should not be used to compete with the developer."

Insight:

The formation of the CAF follows complaints by several app developers that the operators of app stores such as Apple have an unfair advantage as gatekeepers to online marketplaces. The coalition may find a sympathetic ear among consumers, lawmakers and other app developers as app store owners Apple and Google — along with fellow tech giants Facebook and Amazon — face growing antitrust scrutiny for possibly anticompetitive business practices.

While there are a handful of alternative app stores, Apple and Google oversee the most dominant hubs for app activity and support a billion-dollar economy of software developers that market their wares to consumers. Apple and Google generate significant revenue from their app stores by collecting commissions on download fees, in-app purchases and digital subscriptions. They also have unrivaled insights into which apps are most popular, which may give them an advantage in deciding whether to acquire app developers or create their own rival apps.

Those fees have become a significant source of conflict with a more vocal group of app developers including Epic Games and Spotify. Epic's complaints this year reached a fever pitch when it sued Apple and Google for removing its popular game "Fortnite" from their app stores. The game developer violated their rules when it introduced a payment plan to avoid paying a 30% commission on in-game transactions to the tech giants. Apple this month countersued Epic Games, seeking damages for allegedly interfering in its relationships with customers, the Verge reported. The outcome of those suits remains to be seen, and may have an effect over how app stores operate.

Audio streaming platform Spotify also has criticized Apple's fee structure for allegedly favoring rival service Apple Music. Like video streaming company Netflix, Spotify introduced a way for subscribers to pay for a subscription directly instead of going through the App Store, which collects a 30% commission on the first year of a subscription and 15% thereafter. Match Group, which runs dating app Tinder, and e-commerce company Rakuten also have criticized Apple for its App Store policies.

While Google faces antitrust scrutiny on multiple fronts, including its dominance in the programmatic advertising market, Apple's control of the App Store is said to be a focal point for U.S. investigators. Apple also faces a European Union antitrust investigation into the App Store and Apple Pay. It's still too early to tell whether the companies will be forced to change their app store policies and fees, letting app developers collect a greater share of revenue from in-app payments and downloads.