Notice2022-08573
Developing a Report on Competition in the Mobile App Ecosystem
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 22, 2022
Issuing agencies
Commerce DepartmentNational Telecommunications and Information Administration
Abstract
Restoring competition in the American technology sector is a critical priority of the President's Executive order on Promoting Competition in the American Economy. On behalf of the U.S. Department of Commerce, the National Telecommunications and Information Administration (NTIA) is requesting comments on competition in the mobile application ecosystem. The data gathered through this process will be used to inform the Biden-Harris Administration's competition agenda, including, but not limited to, the Department of Commerce's work developing a report to submit to the Chair of the White House Competition Council regarding the mobile application ecosystem.
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[Federal Register Volume 87, Number 78 (Friday, April 22, 2022)]
[Notices]
[Pages 24134-24139]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08573]
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DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
[Docket No. 220418-0099]
RIN 0660-XC052
Developing a Report on Competition in the Mobile App Ecosystem
AGENCY: National Telecommunications and Information Administration,
U.S. Department of Commerce.
ACTION: Notice; request for comment.
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SUMMARY: Restoring competition in the American technology sector is a
critical priority of the President's Executive order on Promoting
Competition in the American Economy. On behalf of the U.S. Department
of Commerce, the National Telecommunications and Information
Administration (NTIA) is requesting comments on competition in the
mobile application ecosystem. The data gathered through this process
will be used to inform the Biden-Harris Administration's competition
agenda, including, but not limited to, the Department of Commerce's
work developing a report to submit to the Chair of the White House
Competition Council regarding the mobile application ecosystem.
DATES: Written comments must be received on or before 11:59 p.m.
Eastern Time on May 23, 2022.
ADDRESSES: All electronic public comments on this action, identified by
docket number NTIA-2022-0001 may be submitted through the Federal e-
Rulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>. The docket established for
this rulemaking can be found at <a href="http://www.regulations.gov">www.regulations.gov</a>, NTIA-2022-0001.
Click the ``Comment Now!'' icon, complete the required fields, and
enter or attach your comments. Responders should include a page number
on each page of their submissions. Please do not include in your
comments information of a confidential nature, such as sensitive
personal information or proprietary information. All comments received
are a part of the public record and will generally be posted to
<a href="http://Regulations.gov">Regulations.gov</a> without change. All personal identifying information
(e.g., name, address) voluntarily submitted by the commenter may be
publicly accessible. For more detailed instructions about submitting
comments, see the ``Instructions for Commenters'' section at the end of
this Notice.
FOR FURTHER INFORMATION CONTACT: Please direct questions regarding this
Notice to <a href="/cdn-cgi/l/email-protection#5d3c2d2d702f3b3e1d3329343c733a322b"><span class="__cf_email__" data-cfemail="4c2d3c3c613e2a2f0c2238252d622b233a">[email protected]</span></a>, indicating ``Notice and Request for
comment'' in the subject line, or if by mail, addressed to Ruth
Yodaiken, National Telecommunications and Information Administration,
U.S. Department of Commerce, 1401 Constitution Avenue NW, Room 4725,
Washington, DC 20230; telephone: (202) 482-4067. Please direct media
inquiries to NTIA's Office of Public Affairs, telephone: (202) 482-
7002; email: <a href="/cdn-cgi/l/email-protection#98e8eafdebebd8f6ecf1f9b6fff7ee"><span class="__cf_email__" data-cfemail="5b2b293e28281b352f323a753c342d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background and Authority
On July 9, 2021, the President signed Executive Order 14036 on
Promoting Competition in the American Economy (E.O.).\1\ As the E.O.
explains, ``[t]he American information technology sector has long been
an engine of innovation and growth, but today a small number of
dominant internet platforms use their power to exclude market entrants,
to extract monopoly profits, and to gather intimate personal
information that they can exploit for their own advantage. Too many
small businesses across the economy depend on those platforms and a few
online marketplaces for their survival.''
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\1\ E.O. 14036, 86 FR 36987, Section (r) (iii) (July 9, 2021),
<a href="https://www.govinfo.gov/content/pkg/FR-2021-07-14/pdf/2021-15069.pdf#page=1">https://www.govinfo.gov/content/pkg/FR-2021-07-14/pdf/2021-15069.pdf#page=1</a>.
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The E.O. includes numerous initiatives to address the problem of
dominant tech platforms undermining competition and reducing
innovation. Included among them is a directive to the Secretary of
Commerce to, in consultation with the Attorney General and the Chair of
the Federal Trade Commission (FTC), conduct a study--including by
conducting an open and transparent stakeholder consultation process--of
the mobile application (app) ecosystem, and submit a report to the
Chair of the White House Competition Council, regarding findings and
recommendations for improving competition, reducing barriers to entry,
and maximizing user benefit with respect to the ecosystem.\2\
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\2\ Software applications are often referred to as ``apps,'' and
the term is used throughout to refer to mobile apps, either native
or web-based.
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By one account, the app economy was valued at $1.7 trillion in
2020, and over 300,000 U.S. companies work in this sector, employing
more than 5.9 million Americans.\3\ The two main app stores are
operated by companies with headquarters in the United States. Global
consumer spending in this ecosystem is also growing rapidly, estimated
by some as nearly doubling from 2016 to 2020, to reach $120 billion.\4\
Entire new sectors of industries have been spawned as a result of app
innovation, such as ride sharing, or have experienced technical
advancement, such as smart home appliances. The app economy is becoming
a fundamental way that Americans interact with their environment. Thus,
it is critical that this market be robust, open, innovative, and
secure--and without barriers to entry and growth.
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\3\ State of the U.S. App Economy: 2020. ACT: The App
Association (Jan. 31, 2021) (ACT Report 2020), <a href="https://actonline.org/wp-content/uploads/2020-App-economy-Report.pdf">https://actonline.org/wp-content/uploads/2020-App-economy-Report.pdf</a>.
\4\ ACT Report 2020.
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On behalf of the Department, and in furtherance of this
requirement, NTIA is requesting comments from the public on competition
in the ecosystem in which mobile apps exist. The goal is to support the
Administration's efforts to promote competition in the tech sector and
to inform NTIA's analysis of ways to support healthy competition in the
market for mobile apps, in particular.
NTIA is the executive branch agency that is principally responsible
by law for advising the President on telecommunications and information
policy. NTIA studies and develops policy advice for the Administration
related to communications and the
[[Page 24135]]
internet,\5\ including to promote the efficient and effective use of
telecommunications and information resources.\6\ In that role, NTIA
regularly works on national policies on the communications
infrastructure.\7\ Additionally, the Department more broadly is charged
with promoting job creation and economic growth.
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\5\ See 47 U.S.C. 902 (b)(2)(D) and (H).
\6\ NTIA has also examined the economic aspects of modern
technology. See, e.g., Internet Policy Task Force & Digital Economy
Leadership Team, Dep't of Commerce, Fostering the Advancement of the
Internet of Things (Jan. 2017), <a href="https://www.ntia.doc.gov/files/ntia/publications/iot_green_paper_01122017.pdf">https://www.ntia.doc.gov/files/ntia/publications/iot_green_paper_01122017.pdf</a>.
\7\ See, e.g., NTIA ACCESS BROADBAND, 2021 Report (Dec. 2021),
<a href="https://www.ntia.doc.gov/files/ntia/publications/ntia_access_broadband_2021_report.pdf">https://www.ntia.doc.gov/files/ntia/publications/ntia_access_broadband_2021_report.pdf</a>.
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This study is aimed at examining unique aspects of competition
involving apps on mobile phones and tablets.\8\ In doing so, we
recognize that the general mobile ecosystem is comprised of a number of
distinct types of entities and interrelated markets. Mobile service
providers play a role in a range of relevant aspects, including
broadband service and determining which apps are pre-loaded or set as
defaults. At the same time, functionality and app distribution are also
dependent upon operating systems and app stores, which function as sub-
ecosystems.\9\ For this study, we are seeking to look beyond the
general to examine particular environments in which different types of
apps and associated businesses operate. For example, there might be
different opportunities and barriers \10\ that distinguish some types
of apps, such as those used for medical purposes, payments, streaming,
social-networks, messaging, or apps that connect to other items by
virtual or physical connections (e.g., to tracking or Internet-of-
Things devices). Other app ecosystems that exist or extend beyond
mobile, such as those for gaming consoles and personal computers, might
be relevant to our review, but only to the extent that analysis of them
offers clear facts for comparison.
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\8\ This is similar to how the mobile ecosystem is described by
United Kingdom's Competition and Markets Authority (CMA) in its
study of the ``Mobile ecosystems.'' See CMA, Market Study Notice;
Mobile Ecosystems, para. 2, June 15, 2021 (UK) (``In this notice the
supply of `mobile ecosystems' means the supply of smartphones and
tablets, and associated software such as operating systems, app
stores, browsers, and applications'').
\9\ See, e.g., Majority Staff of, H. Subcommittee on Antitrust,
Commercial and Administrative Law, Comm. on the Judiciary, Rep. and
Recommendations on Investigation of Competition in Digital Markets
2020 (House Subcommittee Digital Markets Report) (e.g., descriptions
of Google and Apple ecosystems, starting at 211 and 332,
respectively), <a href="https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf">https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf</a>; see also CMA, Mobile Ecosystems;
Market Study Interim Report, Dec.14, 2021 (UK) (UK CMA Interim
Report), <a href="https://www.gov.uk/government/publications/mobile-ecosystems-market-study-interim-report">https://www.gov.uk/government/publications/mobile-ecosystems-market-study-interim-report</a>; Netherland Auth. for
Consumers & Markets, Market Study Into Mobile App Stores (2019)
(referring to bottlenecks at 40), <a href="https://www.acm.nl/sites/default/files/documents/market-study-into-mobile-app-stores.pdf">https://www.acm.nl/sites/default/files/documents/market-study-into-mobile-app-stores.pdf</a>.
\10\ Barriers that could make it harder to enter a field or
succeed might include funding hurdles, restrictions by operating
services or regulators, technical variations requiring additional
software development and maintenance, or obstacles that prevent a
business from obtaining a big enough user base to make their product
workable (e.g., a dating app).
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The Executive Order specifically requires consultation on the NTIA
study with the Department of Justice (DOJ) and the FTC, who are the
primary enforcers of competition law at the federal level. Law
enforcement agencies have been assessing the evolving digital markets
in which apps operate.\11\ Along with actions by the states, private
actors, the courts, and legislators, such legal examinations are
shaping the mobile app ecosystem and have helped elevate the discussion
of competition barriers, as well as proposals to facilitate greater
competition in the app marketplace.\12\ These actions have also been
tangibly altering the ecosystem. For example, the roles of the two
major app stores, including the commission fees they charge, and
restrictions they place on how apps interact with consumers, as well as
technical barriers, have been impacted by decisions by lawmakers across
the globe.\13\
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\11\ See, e.g., United States et al. v. Google, LLC, No. 1:20-
cv-03010, (D.D.C. amended complaint filed Jan 15, 2021); ``FTC Staff
Presents Report on Nearly a Decade of Unreported Acquisitions by the
Biggest Technology Companies,'' FTC press release, Sept. 15, 2021
(study of acquisitions by Alphabet/Google, Amazon, Apple, Facebook,
and Microsoft), <a href="https://www.ftc.gov/news-events/press-releases/2021/09/ftc-report-on-unreported-acquisitions-by-biggest-tech-companies">https://www.ftc.gov/news-events/press-releases/2021/09/ftc-report-on-unreported-acquisitions-by-biggest-tech-companies</a>;
see also Substitute Amended Complaint for Injunctive and Other
Equitable Relief at 44, FTC v. Meta Platforms, Inc., No. 1:20-cv-
03590 (D.D.C. Sept. 8, 2021).
\12\ See, e.g., Amended Complaint, Utah v. Google LLC, No. 3:21-
cv-05227 (N.D. Cal Nov. 1, 2021) (37 AGs v. Google) (37 Attorneys
General allege Google's conduct has driven up competitor prices,
limited consumer choice, misrepresented security risks of apps
outside of its app store); see also Hearing of the Senate
Subcommittee on Competition Policy, Antitrust, and Consumer Rights,
Antitrust Applied: Examining Competition in App Stores (April 21,
2021), <a href="https://www.judiciary.senate.gov/meetings/antitrust-applied-examining-competition-in-app-stores">https://www.judiciary.senate.gov/meetings/antitrust-applied-examining-competition-in-app-stores</a>; Digital platform services
inquiry, Interim report No. 2--App marketplaces, Australian
Competition & Consumer Commission, March 2021.
\13\ See, e.g., South Korea: Amended Telecommunications Business
Act Will Ban App Payment Monopolies, Library of Congress, 2021,
<a href="https://www.loc.gov/item/global-legal-monitor/2021-09-16/south-korea-amended-telecommunications-business-act-will-ban-app-payment-monopolies/">https://www.loc.gov/item/global-legal-monitor/2021-09-16/south-korea-amended-telecommunications-business-act-will-ban-app-payment-monopolies/</a>; KCC Draws Up Standards to Determine Violation of
Prohibited Acts By App Market Business Operators, Press Release,
Korea Communications Commission (Mar. 10, 2022); Epic Games, Inc. v.
Apple, Inc., No. 4:20-cv-05640 (N.D. Cal. Sept. 10, 2021) (regarding
Apple taking a percentage of apps' revenues and limiting their
communication with consumers); see also, Deal on Digital Markets
Act: EU rules to ensure fair competition and more choice for users,
Press Release, European Parliament, IMCO (Mar. 24, 2022) (noting the
proposed legislation requires ``that the largest messaging services
(such as . . . iMessage) will have to open up and interoperate with
smaller messaging platforms, if they so request''), <a href="https://www.europarl.europa.eu/news/en/press-room/20220315IPR25504/deal-on-digital-markets-act-ensuring-fair-competition-and-more-choice-for-users">https://www.europarl.europa.eu/news/en/press-room/20220315IPR25504/deal-on-digital-markets-act-ensuring-fair-competition-and-more-choice-for-users</a>.
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Another area of inquiry has centered around the potential for abuse
of commercial data obtained by competitors, to the detriment of privacy
and competition.\14\ In addition, there are concerns about whether
companies interfere with the creation of innovative new products and
services by limiting the ability of mobile apps and their associated
products and services from accessing a particular set or network of
customers.\15\ While this study will not include a legal assessment of
whether certain practices violate the law, we are interested in
learning of rules and practices that make it harder to open and run
businesses or that harm innovation.
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\14\ See, e.g., Fact Sheet: Executive Order on Promoting
Competition in the American Economy, The White House (July 9, 2021),
<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/">https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/</a>; see also, House Subcommittee Digital Markets
Report, supra note 6, at 43.
\15\ See, e.g., 37 AGs v. Google, supra note 9; see also, House
Subcommittee Digital Markets Report, supra note 6, at 178.
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In addition to competition agencies, other agencies have relevant
roles in overseeing specific types of apps as part of a broader
ecosystem. For example, the Federal Communications Commission (FCC)
also oversees the communications marketplace, including aspects of
competition between mobile service providers, and has for years
assessed the competitive elements of the ecosystem.\16\ The Consumer
Financial Protection Bureau (CFPB) has also been examining payment
ecosystems.\17\
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\16\ See, e.g., FCC, 2020 Communications Marketplace Report, GN
Doc. No. 20-60 (Dec. 31, 2020); FCC, Annual Report and Analysis of
Competitive Market Conditions with Respect to Mobile Wireless,
Including Commercial Mobile Services, DA-16-1061, WT Doc. No. 16-
137, paras. 124-7 (Sept. 23, 2016) (19th Mobile Competition Report)
(discussing mobile applications).
\17\ See, e.g., CFPB, Consumer Access to Financial Records,
advance notice of proposed rulemaking, CFPB-2020-0034, 85 FR 71003
(Nov. 2020).
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In the study, NTIA will take a holistic approach to analyzing the
mobile app ecosystem with the goal of identifying recommendations to
improve competition, reduce barriers to entry, and maximize user
benefit with respect to the ecosystem. In addition to
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fundamentals about the structure of the ecosystem, including how the
apps are distributed, there are many issues that might be relevant to
developers and app users. For example, common occurrences of fraud--or
perceptions of it--might impact whether consumers download apps and
businesses are comfortable offering their products through specific
distribution channels. While there are many issue areas and markets
that could be brought into this study, the scope will only address
topics most relevant to the mobile app ecosystem.
Given the incredible promise that the app system holds, NTIA is
also interested in learning what app users need to maximize user
benefit,\18\ particularly users who use apps in their daily life or for
business operations. There is limited information on how people use
apps. For example, some sources estimate that each mobile device has
20-46 apps loaded at any time, but there is limited comparable data to
confirm whether that is an accurate or optimal number to foster
innovation.\19\
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\18\ See, e.g., Jennifer Bjorhus, Minnesota teen wins Ann
Bancroft grant for app to reduce litter, StarTribune (Dec. 24,
2021), <a href="https://www.startribune.com/minnesota-teen-wins-ann-bancroft-grant-for-app-to-reduce-litter/600130173/?refresh=true">https://www.startribune.com/minnesota-teen-wins-ann-bancroft-grant-for-app-to-reduce-litter/600130173/?refresh=true</a>.
\19\ See, e.g., L. Ceci, Number of apps installed by mobile
users in the United States as of 3rd quarter 2019, Statista (Oct.
19, 2021) (``Statista 2021''), <a href="https://www.statista.com/statistics/267309/number-of-apps-on-mobile-phones">https://www.statista.com/statistics/267309/number-of-apps-on-mobile-phones</a>; Stephanie Chan, U.S.
Consumers Used an Average of 46 Apps Each Month in the First Half of
2021, Sensor Tower (Aug. 19, 2021), <a href="https://sensortower.com/blog/apps-used-per-us-smartphone">https://sensortower.com/blog/apps-used-per-us-smartphone</a>.
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Topic areas that the agency will use to address mobile app
ecosystem competition in the forthcoming report will be informed by
input from public comment. Possible topics are outlined below.
II. Request for Comment
Through this Request for Comment, NTIA is seeking public input to
further develop its understanding of competition within the mobile app
ecosystem. NTIA is looking for concrete and specific information as to
what app developers, organizations, and device (i.e., phones; tablets)
users experience, and any potential challenges or barriers that limit
app distribution or user adoption. To the extent commenters choose to
respond to the specific questions asked, responses should generally
follow the structure below and note the number corresponding to the
question. As detailed below, through this Request for Comment, NTIA is
seeking information on the state of competition, the factors affecting
app development and distribution, and active ways to increase
competition, through government or private sector action.
Definitions and Statistics
1. How should we measure whether the app ecosystem is competitive?
a. How should the ``success'' of an app be measured? \20\
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\20\ See, e.g., Using Pirate Metrics to Analyze Your Mobile
Application's Audience, Jacob Parcell, General Services
Administration (May 12, 2016), <a href="https://digital.gov/2016/05/12/using-pirate-metrics-to-analyze-your-mobile-applications-audience/">https://digital.gov/2016/05/12/using-pirate-metrics-to-analyze-your-mobile-applications-audience/</a>.
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b. How should the ``failure'' of an app be measured? \21\ What is
known about the reasons that app developers no longer offer or support
apps?
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\21\ See, e.g., Why Consumers Download, and Delete, a Retailer's
Mobile App: Promos and rewards drive downloads, eMarketer (July 14,
2016), <a href="https://www.emarketer.com/Article/Why-Consumers-Download-Delete-Retailers-Mobile-App/1014212">https://www.emarketer.com/Article/Why-Consumers-Download-Delete-Retailers-Mobile-App/1014212</a>.
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c. Does the reported total of the number of apps available at any
one time in an app store have bearing on the state of competition among
apps or particular categories of apps? \22\
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\22\ See, e.g., L. Ceci, Number of apps available in leading app
stores as of 2021, Statista (Dec. 14, 2021), <a href="https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/">https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/</a>.
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2. Are there any important and specific entities (or categories of
entities) such that it would be a mistake to omit--or improperly
include--them by defining the ``mobile app ecosystem'' to focus on
mobile devices, such as phones and tablets?
a. If so, how should this study be scoped so that it is optimal but
feasible?
b. For example, should mobile apps offered specifically for
enterprise use (e.g., for use by businesses, not for consumers) be
considered in this study?
3. Apps are not all the same. For example, some have different
technical features and capabilities (e.g., location-based apps compared
to messaging apps), while others are bound by specific regulatory
guardrails (e.g., banking apps or children's apps). In the context of
framing competitiveness within the ecosystem, how should we categorize
types of apps so that they are grouped by distinguishable barriers and
other significant factors? Are there ways to best categorize or segment
the market to diagnose specific market barriers, such as those that
could impact app developers, or consumers?
a. Should distinctions be made based on type of content and app
functionality?
b. Should distinctions be made based on the level of hardware or
operating system integration required for the app to function? For
example, categories might include apps that access location data,
special-purpose hardware (e.g., near field communications), secure
elements for payment, or other credentials.
c. Should a distinction be made for apps that are the primary way
(or the only way) the app provider interacts with users, as opposed to
apps that are an extension of an existing digital or physical business?
Do app-based businesses face different competitive constraints than
businesses that have a brand and presence outside of mobile apps?
4. How should web apps (browser-based) or other apps that operate
on a mobile middleware layer be categorized?
5. There are some indicators that there is a difference in kind
between some apps that generate large amounts of money or are
downloaded often and most other apps. For example, one industry analyst
reported that 97% of publishers that monetize through the Apple App
Store earned less than $1 million per annum in 2021, compared to other
reports of more than $1 billion earned by the top 13 apps (including
games) on both Apple and Google platforms.\23\ What is the best way to
assess the competition environment for less popular apps and start-ups?
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\23\ State of Mobile 2021, App Annie, at 8, (last visited April
14, 2022), <a href="https://www.data.ai/en/go/state-of-mobile-2021/">https://www.data.ai/en/go/state-of-mobile-2021/</a>; see also
App Annie: Global app stores' consumer spend up 19% to $170B in
2021, downloads grew 5% to 230B, Sarah Perez, TechCrunch, Jan. 12,
2022, <a href="https://techcrunch.com/2022/01/12/app-annie-global-app-stores-consumer-spend-up-19-to-170b-in-2021-downloads-grew-5-to-230b/?utm_medium=TCnewsletter&tpcc=TCappnewsletter">https://techcrunch.com/2022/01/12/app-annie-global-app-stores-consumer-spend-up-19-to-170b-in-2021-downloads-grew-5-to-230b/?utm_medium=TCnewsletter&tpcc=TCappnewsletter</a>.
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a. Can any potential harms, such as deficiencies in data security
and privacy protections, be traced back to the current market
imbalance?
b. Is there evidence to suggest that consumers are less likely to
avoid or stop using a particular app even if they would prefer a more
privacy enhancing environment because of a lack of competitors offering
similar services?
Software and Support for Developers
6. What unique factors, including advantages and obstacles, are
there generally for app development -- especially start-ups -- that are
relevant for competition? \24\
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\24\ See, e.g., Letter from Congresswoman Eshoo and colleagues
to Director Panchanathan, National Science Foundation, and Acting
Director Jarmin, Census Bureau, Nov. 4, 2021, <a href="https://eshoo.house.gov/sites/eshoo.house.gov/files/AnnualBusinessSurveyLetter11421.pdf">https://eshoo.house.gov/sites/eshoo.house.gov/files/AnnualBusinessSurveyLetter11421.pdf</a>.
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a. Are there unique market dynamics in this ecosystem (such as the
existence of a small number of dominant technology companies) that
affect
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mobile apps' ability to secure funding? \25\
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\25\ See, e.g., Written Testimony of FTC Commissioner Rohit
Chopra before the U.S. House of Representatives, Committee on the
Judiciary, Subcommittee on Antitrust, Commercial, and Administrative
Law Hearing on Online Platforms and Market Power, Part 3: The Role
of Data and Privacy in Competition, (Oct. 18, 2019) (expressing
concern ``that many investors are reluctant to allocate capital to
innovators that seek to challenge and disrupt this dominance.
Instead, investors tell me they prefer to fund companies that can
eventually be sold an incumbent''), <a href="https://www.ftc.gov/system/files/documents/public_statements/1549812/chopra_-_testimony_at_hearing_on_online_platforms_and_market_power_part_3_10-18-19.pdf">https://www.ftc.gov/system/files/documents/public_statements/1549812/chopra_-_testimony_at_hearing_on_online_platforms_and_market_power_part_3_10-18-19.pdf</a>.
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b. Are some methods of monetization essential to the economic
success of an app? What are they? For example, is there pressure to
incorporate advertising or collect personal data of users \26\ or
engage in unique relationships with data aggregators?
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\26\ see, e.g., Free and paid distribution for Android and iOS
2022, Statista, March 14, 2022, (last visited April 14, 2022) (Most
apps are offered at no direct monetary cost to the user), https://
www.statista.com/statistics/263797/number-of-applications-for-
mobile-phones/
#:~:text=As%20of%20March%202021%2C%2096.7%20percent%20of%20apps,Store
%20and%20Google%20Play%20as%20of%20March%202021.
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7. Are there particular obstacles preventing more development from
different communities, such as by location/region, ethnicity/race,
language, or gender? \27\
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\27\ See, e.g., Congressional App Challenge, Inclusion and
Diversity, <a href="https://www.congressionalappchallenge.us/impact/#Diversity">https://www.congressionalappchallenge.us/impact/#Diversity</a>; see, generally, Congressional App Challenge (last
visited April 18, 2022), <a href="https://www.congressionalappchallenge.us/">https://www.congressionalappchallenge.us/</a>.
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8. Are there studies or specific examples of the costs or
advantages for app developers to build apps for either, or both, of the
main operating systems, iOS and Android (which have different
requirements)? \28\
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\28\ See, e.g., App Development Costs, Business of Apps (2022)
(April 1, 2022), <a href="https://www.businessofapps.com/app-developers/research/app-development-cost/">https://www.businessofapps.com/app-developers/research/app-development-cost/</a>; contrast Sophie Zoria, How the
Fragmentation of iOS and Android Platforms Affects App Development,
Medium, Swag Soft, June 23, 2020, <a href="https://medium.com/swag-soft/how-the-fragmentation-of-ios-and-android-platforms-affects-app-development-f992cb87bafc">https://medium.com/swag-soft/how-the-fragmentation-of-ios-and-android-platforms-affects-app-development-f992cb87bafc</a>.
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a. What are the challenges specific to multi-platform development
and how can they be mitigated?
b. What are the costs and advantages of developing standalone apps
for these platforms relative to other means of providing the same
services or content, such as web apps, which can operate across
platforms?
9. What role does interoperability play in supporting and advancing
a competitive mobile app ecosystem?
a. What are the key characteristics of interoperability as it
relates to the mobile app ecosystem?
b. What other barriers (e.g., legal, technical, market, pricing of
interface access such as Application Programing Interfaces [APIs])
exist, if any, in fostering effective interoperability in this
ecosystem? How are these barriers different or similar than those
present in other ecosystems?
c. How does data portability, or lack thereof, factor into
consumers keeping the same app if they switch from one operating system
(iOS or Android) to another? \29\
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\29\ For descriptions of some difficulties reported in this
area, see Majority Staff of, H. Subcommittee on Antitrust,
Commercial and Administrative Law, Comm. on the Judiciary, Rep. and
Recommendations on Investigation of Competition in Digital Markets,
at 102-104 (2020).
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10. While apps can be coded from scratch, Software Development Kits
(SDKs) and other technical tools can make it easier for developers to
create apps. What data is available to show how such tools shape the
ecosystem and affect the ability of developers to compete?
a. Which tools are most often used by app developers and what are
the entities that offer those tools?
b. Do these tools make it easier for a developer to create apps for
multiple platforms? How so? Are there any trade-offs (e.g.,
performance, battery life, or stability) for using these tools?
c. Are developers of certain types of apps more likely to use the
assistance?
d. Are there privacy or security concerns associated specifically
with these tools?
e. What empirical data exists to support findings on this topic?
11. How do policy decisions by firms that operate app stores, build
operating systems, or design hardware impact app developers (e.g.,
terms of service for app developers)? What empirical data exists to
support those findings?
a. In particular, how does a lack of transparency about app market
rejections affect app developers (e.g., costs)?
b. How do the policy decisions affect or limit the feasibility or
availability of alternative models of app development (e.g. open
source), delivery (e.g. browser-based apps), or funding (e.g. non-
commercial or donation-based models)?
12. What types of labor restrictions or workforce pipeline
challenges, if any, limit paths for app innovation? What may solutions
look like?
Avenues for App Distribution
13. Some mobile apps are pre-loaded on mobile devices or set as
default apps, while others are only available through an app store,
through a browser (web apps), or, for devices using the Android system,
by sideloading. Is there data comparing these mechanisms and their
effect on app distribution?
a. Is there a competitive advantage to being preloaded or available
by default to the users of phones and tablets? What is the evidence to
support or contradict there being an advantage? \30\
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\30\ While the UK CMA's Interim Report, for example, refers to
some studies in this area, the raw data and it suggests further
study is necessary. See, e.g., UK CMA Interim Report at 277.
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b. Is there data on the number of developers that have been able to
have their apps preloaded or available as default apps or the types of
apps?
c. What information is available on the types of agreements these
developers reached and with whom to preload or set their app as a
default app?
14. As noted above, governments and courts are already exploring
concerns about control of app access to users exercised by mobile app
stores and other ecosystem participants.
a. What data and studies exist that identify specific additional
obstacles that developers and businesses might face related to the
distribution of apps? \31\ Commenters may reference factual findings in
existing cases and filings in government explorations.\32\
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\31\ See, e.g., Letter to Kate Reader and Morag Bond, Co-General
Managers, Digital Platforms Unit, Australian Competition and
Consumer Comm'n, from Microsoft, Oct. 16, 2020, <a href="https://www.accc.gov.au/system/files/Microsoft%20%2816%20October%29.pdf">https://www.accc.gov.au/system/files/Microsoft%20%2816%20October%29.pdf</a>.
\32\ See, e.g., Report regarding Fact-Finding Survey on Digital
Platforms (Business-to-Business transactions on retail platform and
app store), Fair Trade Commiss'n, (Oct. 31, 2019) (Japan).
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b. In particular, what studies have been done on requirements that
apps use an app store or operating system's own services or the appeal
of alternative mechanisms that do not tie app access to using other
products or services from those mechanisms?
15. How do, or might, alternative app stores (other than Google
Play or the Apple App Store), affect competition in the mobile app
ecosystem?
a. What data is there to assess how well existing alternative
stores distribute apps, in general or specific types of apps?
b. What unique barriers are there affecting each of the main
operating systems (Android, iOS) that might prevent web apps or--to the
extent allowed on Android system--alternative app stores and
sideloading, from gaining more popularity with users and app developers
than they currently have?
c. Is there analysis comparing competition on iOS ecosystem (where
app distribution is limited) to that of alternative distribution
mechanisms on Android operating systems?
16. What evidence is there to assess whether an app store model is
necessary
[[Page 24138]]
for mobile devices, instead of the general-purpose model used for
desktop computing applications?
17. Mobile app stores act as initial screeners and responders for
concerns about mobile app content, such as fraudulent apps and
malware.\33\ Similar issues for screening and responding exist in other
contexts, such as website hosting and search engine retrieval. What
empirical data is there analyzing any unique content screening issues
related to mobile app stores that affect competition?
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\33\ See, e.g., App Store stopped over $1.5 billion in suspect
transactions in 2020, Apple, <a href="https://www.apple.com/newsroom/2021/05/app-store-stopped-over-1-5-billion-in-suspect-transactions-in-2020/">https://www.apple.com/newsroom/2021/05/app-store-stopped-over-1-5-billion-in-suspect-transactions-in-2020/</a>;
see also Google Developer Policy Center (with policies prohibiting
items such as impersonation of other apps) (last visited April 14,
2022), <a href="https://play.google.com/about/developer-content-policy/">https://play.google.com/about/developer-content-policy/</a>.
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a. Is there evidence of legitimate apps being rejected from app
stores or otherwise blocked from mobile devices? Is there evidence that
this is a common occurrence or happens to significant numbers of apps?
b. What assessments are there of their effectiveness, or lack
therefore, on security and privacy of end users? \34\
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\34\ See, e.g., Complaint, In the Matter of Support King LLC
(<a href="http://SpyFone.com">SpyFone.com</a>), FTC, No. 1923003 (filed Dec. 21, 2021) (complaint
filed with settlement decision and order), <a href="https://www.ftc.gov/system/files/documents/cases/1923003c4756spyfonecomplaint_0.pdf">https://www.ftc.gov/system/files/documents/cases/1923003c4756spyfonecomplaint_0.pdf</a>.
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c. Are there disincentives or unique barriers affecting the degree
of security and privacy protections offered by alternative app stores?
18. Are there other areas, specific technologies or procedures,
that offer lessons on more and less successful ways to screen out
problematic apps? What are the characteristics of such success?
a. Are there good examples by enterprise users? \35\
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\35\ For more on mobile vetting and security issues, see, e.g.,
Vetting the Security of Mobile Applications, Revision 1, NIST
Special Publication 800-163, National Institute of Science and
Technology (NIST) (April 2019), <a href="https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-163r1.pdf">https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-163r1.pdf</a>; see also Mobile Device
Security: Corporate-Owned Personally-Enabled (COPE), NIST Special
Publication 1800-21 (Sept. 2020), <a href="https://doi.org/10.6028/NIST.SP.1800-21">https://doi.org/10.6028/NIST.SP.1800-21</a>.
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b. For example, some devices allow sideloading only after warning
the user to make sure they trust the app before proceeding with the
download, in a way similar to how some browsers issue warnings for
unknown websites. What material exists about the efficacy of such
methods?
c. What roles, if any, do independent or third party security
testing play in the app store ecosystem?
d. Does the current model discourage competition and innovation in
the development or advancement of security testing?
19. How does the existence of imposter and other fraudulent apps
affect developer incentives or legitimate app lifecycles?
App Users
20. What research exists regarding the number of active apps
consumers have on their mobile devices at any one time and how often
they try new ones?
a. Are there generalizations that can be made based on items such
as the cost of the app, type of broadband access or device, or even
categories of phone users?
21. How do most consumers find and make decisions to use apps?
a. Is there data to show whether the usage of an app or any other
relevant metric for performance is tied to existing brand visibility
outside of the mobile app ecosystem?
b. Is there data about how often people use the search feature in
an app store, search engines through browsers, or particular ranking
lists of popular apps or app storefronts?
c. Is there empirical data that examines how app rankings, app
reviews, or other objective measures of apps (for example, popularity,
quality, or number of downloads) are used (or manipulated) to influence
consumer choices?
22. The E.O. asks the Department to explore ways to maximize ``user
benefit'' with regard to competition in the mobile app ecosystem. How
should we measure or consider user benefit?
a. What is the appropriate scope of users for consideration? Should
it include developers?
b. If there are conflicts between end-user and developer interests,
how does this affect the assessment of user benefit?
c. How might convergence of end-users and developers--through low-
code environments, for example--affect this dynamic moving forward?
23. Do apps that are developed for, or used by, certain communities
(such as by income, ethnicity/race, or gender) face significantly
different competitive challenges? What are the challenges?
Other Factors
24. Some apps make use, or would like to make use, of additional
mobile device components beyond those that are more commonly accessible
(e.g., camera, microphone, contacts) in order to offer an innovative
product or service, but the operating system or device provider does
not allow such access.\36\ Similarly, for some apps, it might be
essential to be able to interconnect to other hardware and services,
such as cloud services. What are the valid security concerns and
technical limitations on what device functionality an app can access?
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\36\ See, e.g., Testimony of Testimony of Kirsten Daru, Chief
Privacy Officer and General Counsel for Tile, Inc., before the
Senate Committee on the Judiciary Subcommittee on Competition
Policy, Antitrust, and Consumer Rights (April 2021), <a href="https://www.judiciary.senate.gov/imo/media/doc/04.21.21%20Kirsten%20Daru%20Senate%20Judiciary%20Testimony%20Final.pdf">https://www.judiciary.senate.gov/imo/media/doc/04.21.21%20Kirsten%20Daru%20Senate%20Judiciary%20Testimony%20Final.pdf</a>.
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a. What factors should be considered in striking a balance between
encouraging companies to ensure proper security measures, while
allowing third parties to access the protected features that might
allow for further innovation and competition?
b. Are there specific unnecessary (e.g., technical) constraints
placed on this ability of app developers to make use of device
capabilities, whether by device-makers, service providers or operating
system providers, that impact competition?
c. Are there other means or factors to consider for mitigating
specific risks that would not inhibit competition?
25. What unique challenges, if any, do software updates pose for
app competition, including updates driven by the app developers and
those necessitated by other ecosystem changes, such as operating system
updates? How does this impact security and costs for those apps,
products, and services?
26. Are there governance practices, regulations or laws that impact
competition among certain categories of apps more than others, or their
non-app counterparts?
Potential Actions To Increase Competition
27. What specific measures might the federal government take to
foster healthy competition--especially for nascent app innovation--in
the mobile app ecosystem?
28. What specific actions could the private sector and civil
society take to ensure and promote healthy app competition (such as
technical standards development or monitoring)? \37\
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\37\ See, e.g., Adapting ahead of regulation: a principled
approach to app stores, Brad Smith, President & Vice Chair,
Microsoft, Feb 9, 2022, <a href="https://blogs.microsoft.com/on-the-issues/2022/02/09/open-app-store-principles-activision-blizzard/">https://blogs.microsoft.com/on-the-issues/2022/02/09/open-app-store-principles-activision-blizzard/</a>.
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Instructions for Commenters
NTIA invites comment on the full range of issues presented by this
Notice, including issues that are not specifically
[[Page 24139]]
raised in the above questions. Commenters are encouraged to address any
or all of the questions above. To the extent commenters choose to
respond to the specific questions asked, responses should generally
follow the structure above and note the number corresponding to the
question.
Comments that contain references to studies, research, and other
empirical data that are not widely available should include copies of
the referenced materials along with the submitted comments. Commenters
should include the name of the person or organization filing the
comment, which will facilitate agency follow up for clarifications as
necessary.
Commenters are advised not to incorporate information that concerns
business trade secrets or other confidential commercial or financial
information as part of the comment.\38\
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\38\ See also 15 CFR 4.9(c) (concerning the designation of
business information by commenters).
Dated: April 18, 2022.
Milton Brown,
Chief Counsel (Acting), National Telecommunications and Information
Administration.
[FR Doc. 2022-08573 Filed 4-21-22; 8:45 am]
BILLING CODE 3510-60-P
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