The Fair Trade Commission is in the process of developing new legislation designed to combat the dominance of major tech companies like Apple and Google in the smartphone app market. This legislation would impose significant penalties on these tech giants, with fines amounting to 20 percent of their related domestic sales if they persist in monopolizing the distribution of smartphone apps. The aim of this proposed law is to foster fair competition within app stores and payment systems by prohibiting practices that hinder alternative app stores and external payment options.
Under the current plans, the legislation would prevent companies such as Apple Inc. and Google LLC from suppressing fair competition in smartphone app markets and payment systems. The Fine Trade Commission determined that the existing penalties for violations of the Anti-Monopoly Law were insufficient to serve as an effective deterrent against the monopolistic behaviors of these tech giants. With the proposed legislation, companies that breach these regulations would face penalties in the form of surcharges equivalent to 20 percent of their related sales for the first offense, increasing to 30 percent for repeat infringements.
In an effort to enhance consumer choices and reduce service fees, the FTC seeks to introduce more competition into the app store and payment system landscape through this new legislation. While the Anti-Monopoly Law primarily addresses antitrust practices retroactively, the proposed law aims to proactively prevent such behaviors through "ex-ante regulations." By taking preemptive measures, the FTC hopes to stay ahead in a rapidly evolving digital market by fostering competition and preventing monopolistic practices in advance.