Apple, Google app stores impede competition in South Africa

The Apple App Store and Google’s Play Store have been found to limit competition through anti-steering rules and the commission fees they charge app developers. 

These findings resulted from a broad investigation launched in 2021 by the Competition Commission into various tech platforms operating in South Africa over concerns they distorted competition.

Africa’s most developed economy joins several other large jurisdictions, such as the US, Europe and India, in looking at the dominance of Google and Apple over software application stores.

The commission said the Apple App Store and Google’s Play Store account for most mobile users, app downloads, and app-based revenue earned in South Africa.

Google’s Play Store is the default app store on all Android devices in South Africa and accounts for most downloads and users. Apple’s App Store accounts for fewer devices but a larger share of app-based revenue due to its high-end target market. 

These stores make money by charging a commission on sales generated by the app through the delivery of digital content. 

To measure these transactions and charge the commission, the stores do not offer alternative payment processing services on their stores for all in-app payments. 

Apps can circumvent this by enforcing an additional login on the app, which allows users to purchase content through other payment channels. 

However, the app stores have strict anti-steering rules to prevent app developers from circumventing their payment processors by steering them to alternative options. 

Thus, the commission ruled that these app stores restrict competition from alternative payment methods, enabling them to charge whatever commission they want. 

To address this, the commission is requiring that Google and Apple engage in remedial actions such as no longer preventing apps from directing consumers to alternative payment methods. 

The Competition Commission will enforce similar provisions imposed in the European Union’s Digital Markets Act, including compliance with fair and reasonable pricing rules. 

Furthermore, the commission said Google and Apple must also provide South African consumers with their own local curation of apps on their stores to ensure competition from domestic apps is not impeded.