Australia is, at last, getting serious about app store competition. Treasury's advancing ex-ante digital competition regime — modelled in part on the European Union's Digital Markets Act (DMA) — flags app marketplaces as a priority service for designation, with service-specific obligations expected to cover sideloading, alternative in-app payments, and anti-steering restrictions. The framework picks up the thread of the Australian Competition and Consumer Commission's (ACCC) long-running Digital Platform Services Inquiry, which concluded years ago that mobile app distribution is a concentrated bottleneck dominated by two firms.
For Australian developers, consumers, and the broader app economy, this is a consequential turn. Done well, it could lower the cost of digital distribution, unlock new business models, and give small Australian studios a fairer shot. Done poorly, it risks importing the worst of Europe's compliance theatre without the upside.
The ACCC's long road to designation
The ACCC has been signalling concerns about Apple's App Store and Google Play since at least its 2021 interim report on app marketplaces, which found that the dominance of the two stores limits competition, raises prices for developers, and constrains user choice. Successive reports under the five-year Digital Platform Services Inquiry have repeatedly recommended that Australia adopt an ex-ante competition tool rather than rely solely on slow, case-by-case enforcement under Part IV of the Competition and Consumer Act.
Treasury's framework — building on a 2024 consultation paper on Digital Competition Reforms — moves in that direction. It contemplates designating firms that meet quantitative thresholds for specified "digital services," then layering service-specific conduct rules on top. App marketplaces are squarely in the first tranche.
What the obligations are likely to look like
The contours track familiar DMA-style commitments:
- Sideloading and alternative app stores — allowing users to install apps from outside the default marketplace.
- Alternative in-app payments — letting developers process transactions outside Apple's or Google's billing systems, avoiding the 15-30% platform commission.
- Anti-steering reform — letting developers tell users about cheaper offers available on the web.
- Interoperability and data portability for developers and consumers.
These are reasonable starting points. South Korea pioneered alternative-payments rules in 2021 via amendments to its Telecommunications Business Act. Japan followed in 2024 with the Smartphone Software Competition Act. The United Kingdom's Digital Markets, Competition and Consumers Act 2024 introduced "Strategic Market Status" designations with bespoke conduct requirements. And in the United States, Epic Games' December 2023 jury verdict against Google over Play Store practices showed courts willing to find anti-competitive conduct without legislation.
The EU's cautionary tale
The DMA is the clearest template — and the clearest warning. Since its enforcement began in March 2024, compliance has been messy. Apple's response in the EU layered a new "Core Technology Fee" on developers who use alternative distribution, drawing accusations of malicious compliance and triggering further European Commission investigations. Google's anti-steering changes have been similarly contested. Meanwhile, European consumers report little tangible benefit, and small developers face new legal and engineering overhead just to determine which rules apply to them.
The lesson for Canberra is not to abandon ex-ante regulation — case-by-case enforcement has plainly failed to move the needle in mobile distribution — but to design rules that are clearer, narrower, and harder to game.
A pro-innovation playbook for Treasury
Australia is well positioned to learn from both Brussels' missteps and Asia's earlier moves. A proportionate Australian regime should:
- Set crisp, outcome-based obligations. Rather than dozens of detailed prohibitions, require that gatekeepers permit alternative payment processors and alternative distribution on commercially reasonable terms, with the ACCC empowered to test whether fees and friction are genuinely reasonable.
- Preserve security and trust as legitimate objectives. Platforms should retain the ability to enforce baseline malware, fraud, and child-safety protections — but these justifications should be evidenced, narrowly tailored, and subject to independent review.
- Avoid duplicative compliance. Where firms already comply with substantively similar DMA or UK SMS obligations, Australia should accept equivalence rather than demand bespoke local engineering.
- Protect the small-developer interest, not just rival platforms. The point of reform is more choice and lower costs for Australian app makers and consumers, not to subsidise large incumbents seeking to escape store commissions while still benefiting from store infrastructure.
- Build in sunset and review clauses. Mobile markets move fast; AI assistants and on-device agents may reshape app distribution within this regime's lifetime. Hard-coded rules should expire and be re-justified.
The competitive stakes
Apple and Google's mobile operating systems together account for essentially all smartphones sold in Australia. App store commissions are a meaningful tax on a digital economy in which Australian developers — from Atlassian-scale enterprises to indie game studios on the Gold Coast — increasingly compete globally. Even modest reductions in distribution friction can translate into material gains in startup formation and consumer surplus.
But the benefits will not be automatic. The DMA's first two years show that ex-ante rules are only as good as their enforcement and as their resistance to creative compliance. Australia's regime will succeed if it forces genuine choice in payments and distribution without unleashing a thicket of paperwork, and if it does so in a way that other open-economy democracies can plausibly converge on.
This is a moment for confident, careful policymaking — not maximalism. Get the design right, and Australia will have shown that the open-internet, pro-innovation alternative to Brussels-style prescriptiveness is real.