App stores should be more competitive, says Microsoft

Microsoft on Thursday said it would give developers more control in its app store, providing a sharp contrast to Apple, which is facing growing pressure for its firm grip on its App Store.

Microsoft on Thursday said that it was adopting 10 “principles” for its app store, the Microsoft Store, that customers can use to install programs on Windows 10, the computer operating system. The guidelines include giving developers the ability to sell different services on their apps and their websites, and to allow users and developers to access third-party app stores.

The announcement was not a major change in policy for Microsoft, whose app store is more open than Apple’s. But it added a powerful voice to a raging debate about how the large tech companies should manage their app stores, where they act as powerful gatekeepers between developers and consumers.

The principles aim “to promote choice, ensure fairness and promote innovation,” Rima Alaily, deputy general counsel at Microsoft, said in a blog post announcing the approach.

Apple is at the center of the debate over app marketplaces because it forces developers to distribute their apps on iPhones and iPads through its hugely lucrative App Store and then takes a 30% cut of many of those apps’ sales. Epic Games, maker of the popular game “Fortnite,” has accused the tech giant in an antitrust lawsuit of abusing its size to overcharge app developers. On Tuesday, House lawmakers claimed that Apple had a monopoly on the apps marketplace for iPhones and iPads, leading to higher prices for consumers.

Apple has defended its App Store and questioned the findings of the House report, saying that the cut it takes from developers is standard in the industry, and developers have flourished under the trust customers have in safely downloading apps on iPhones and iPads.

“The App Store has enabled new markets, new services and new products that were unimaginable a dozen years ago, and developers have been primary beneficiaries of this ecosystem,” the company said Tuesday. It did not respond to a request for comment about Microsoft’s announcement.

Microsoft’s principles largely echo the proposals made by the Coalition for App Fairness, a new nonprofit representing app developers. The group’s members include Epic Games, Spotify and Match Group, the developer of Tinder. The coalition has said that it aims to coordinate the response of smaller companies in the hope of changing the standards for large app stores.

Alaily said she hoped Microsoft’s commitment to the standards can be a “productive” example for regulators and lawmakers as they consider whether to reform the app store model.

Microsoft’s own application store is not the only way, nor even the primary way, customers get new programs on a computer. Most users download them from a developer’s website. The company already allows other app stores on Windows 10, such as game streaming platform Steam.

But Microsoft is a developer itself and has clashed with Apple recently over its all-you-can-play cloud gaming app, which lets users access many games through one interface. Apple said each game would need to be individually approved by Apple as a stand-alone game — and give Apple a cut. In July, Brad Smith, Microsoft’s president, told the House antitrust committee that he believed Apple’s behaviour resembled the controlling practices that got Microsoft into antitrust problems decades ago.

“As an app developer, we have been frustrated at times by other app stores that require us to sell services in our apps even when our users don’t expect or want them, and we cannot do so profitably,” Alaily wrote.

Microsoft said its principles would not apply to its Xbox gaming console, which it argued followed a different business model. It said gaming consoles are sold with little or no profit, or at times below cost, and instead recoup the development costs through the games.