A proposal to force technology firms into allowing consumers to use alternative app stores and make third-party payments inside apps will damage Australia’s economy, halt innovation, and threaten consumers’ security and privacy, Apple has told the federal government.
A Treasury proposal for a new digital competition regime similar to that in the European Union could force Apple to open up its App Store ecosystem, allowing 'sideloading' of unvetted iPhone and iPad apps from other sources and removing restrictions on alternative in-app payment methods.
Australian consumers and app developers are already taking part in a class action lawsuit against Apple and Google, alleging they have charged excessive fees and restricted developers from offering other means for app distribution and in-app payments.
The government proposed its new rules in December 2024 following recommendations from market regulator the Australian Competition and Consumer Commission (ACCC).
In a 28-page submission sent to Treasury in February and seen by Information Age, Apple argued Australia should not follow in the EU’s footsteps, as changing app store rules would cause “harms to its own citizens” by reducing protections against scams, malware, and potentially harmful content.
The company also said the proposed changes had “potential negative repercussions” for its own ecosystem, with potential of fines of up to $50 million — or 30 per cent of turnover for a period of non-compliance — posing “significant risks for the continued ability of digital platforms to serve Australian consumers”.
Treasury previously stated the new regime would “deliver better competition, lower prices, and greater choice”, but Apple argued "any new regulatory framework should not deny consumers the choice of a differentiated, integrated, private, and secure product offering”.
In a statement on Friday, the company reiterated it was “concerned the proposed digital competition regime will chill innovation and threaten user security”.
Information Age understands Apple plans to comply with legislative changes made by Australia, but believes it has been unfairly targeted by critics who believe it does not want to share its technologies.
“We welcome the opportunity to continue engaging with the government on behalf of our Australian customers,” the company said.
Apple was “proud to support” developers, CEO Tim Cook said late Thursday as the firm shared a study it commissioned which found its App Store had facilitated $3 billion in developer billings and sales for digital goods and services across Australia and New Zealand in 2024, as well as $9.1 billion for physical goods and services including retail, groceries, and ride-sharing.
Treasury said it had been “considering the submissions" it received from stakeholders since consultation on its proposal closed in mid-February, but did not provide a timeline for next steps.
Porn, torrenting, and Meta threaten to ‘undermine’ ecosystem
Apple argued in its submission that the EU’s Digital Markets Act (DMA) provided “an illustrative example of why Australia should not rush to follow in the EU’s footsteps”, as it allowed users to sideload unvetted apps, including some used to view pornography, distribute malware, or share pirated content.
“These apps undermine the trust and confidence of users and content creators alike in the ecosystem that Apple has worked for more than a decade to make the best in the world,” the company said.
Apple also attempted to align itself with the federal government’s push to protect Australians from scams, arguing that its concern over unvetted apps was “consistent with the express advice Australian cybersecurity agencies have given to consumers to never sideload and only use official app stores to download apps to their devices”.
While Google's Android platform allows third-party purchases and app sideloading outside of the Google Play store, the company has allowed some developers to force users to use Play Store versions of apps.
The largest manufacturer of Android devices, Samsung, also typically disables sideloading by default.
Google did not respond to a request for comment.
Google's Play Store and Apple's App Store could be forced to relax rules around alternative app stores and payments under the federal government's plans. Image: Shutterstock
Apple reiterated in its submission its concern that Meta — which owns Facebook, Instagram, Threads, and WhatsApp — would attempt to harvest more data about Australians if the government legislated greater interoperability between tech platforms, as the social media giant had made the most requests for access to Apple technologies in the EU.
Apple has previously stated that Meta has requested access to features such as messaging, devices connected through Bluetooth, and information about a user’s Wi-Fi networks.
“These requests could enable Meta to read all of a user’s messages and emails, see every phone call they make or receive, track every app they use, view all of their photos, look at their files and calendar events, log all of their passwords, and more,” Apple claimed.
“… Meta’s push to seek increased access to Apple’s technologies is a far cry from empowering smaller developers or increasing competition.”
Apple suggested Australia look towards “more balanced approaches” like Japan’s Act on Promotion of Competition for Specified Smartphone Software (SSCPA) which “permits service providers to consider user security and privacy" when complying with competition law.
Google’s ad tech dominance under threat
The other key digital service to be initially considered under the government's proposed competition regime is advertising technology — commonly called ad tech — which poses a threat to Google’s dominance of the online search and advertising sector.
Google is facing at least two class action lawsuits in Australia over its local ad tech fees and policies.
Former assistant treasurer Stephen Jones said in December that Google dominated digital ad tech services in Australia, “driving up prices for advertisers, and reducing profits for publishers who display ads”.
While Google has denied dominating search in Australia, more than 90 per cent of local internet searches are estimated to go through the company.
A US judge last year found Google had created an illegal monopoly in that country's search engine industry by violating antitrust law and spending billions to be the default search provider on most mobile devices, which has led to calls for it to be forced to divest its Chrome web browser.
Some US politicians are also pushing for Google's Play Store to face greater competition, with a federal judge in that country ordering the company further open up its ecosystem in October, pushing it to distribute third-party app stores and share its Play Store apps with rivals.
The company appealed against the order in February.
