What you need to know
- The FTC is taking aim at Apple and Google in a settlement with a mobile gaming platform.
- Democratic Commissioners called Apple one of the gatekeeping giants of the mobile gaming industry.
As reported by CNBC, a settlement between the FTC and mobile gaming platform Tapjoy also took aim at Apple and its control over the App Store. Democratic Commissioners Rohit Chopra and Rebecca Kelly Slaughter lambasted Tapjoy for amplifying "false offers by its business partners, who baited gamers with big rewards only to cheat them when it was time to pay up."
"It appears that Tapjoy amplified false offers by its business partners, who baited gamers with big rewards only to cheat them when it was time to pay up," they wrote. "Tapjoy did little to clean up the mess, even when hundreds of thousands of gamers filed complaints. This also harmed developers of mobile games, who were cheated of advertising revenue they were entitled to."
However, the commissioners labeled the platform as merely "a minnow next to the gatekeeping giants of the mobile gaming industry, Apple and Google."
"By controlling the dominant app stores, these firms enjoy vast power to impose taxes and regulations on the mobile gaming industry, which was generating nearly $70 billion annually even before the pandemic," they said. The commissioners added that those "gatekeepers" can harm developers and innovation, and that under "heavy taxation" from those major players, developers have been pushed to "alternative monetization models that rely on surveillance, manipulation, and other harmful practices."
Apple has long argued that one of the main reasons for its tight control over the App Store is to ensure that it is a safe place for people to use apps. The statement from the FTC, despite the commissioner's argument against the company, seems to acknowledge that Tapjoy is an example of what can happen when someone like Apple does not have control over its platform.
"By offering a platform connecting advertisers, gamers, and game developers, Tapjoy allows these developers to generate advertising revenue that Apple and Google do not tax," the statement reads. "But this monetization model also creates opportunities for fraud…"
Apple has been under increasing pressure for its control over the App Store. Most recently, the company welcomed developers to the App Store Small Business Program, which offers a 50% reduction in App Store fees to about 98% of developers.