Apple And Google, Take Note: Newly Enacted EU Law Aims To Protect Developers From Arbitrary Decisions Of Tech Giants

Have you found your apps suspended or removed from the Play Store or App Store for no apparent good reason? A new EU law that came into force this week may help.

Passed in June 2019 and enacted at the weekend, regulation (EU) 2019/1150 is aimed at improving matters for developers suffering from seemingly arbitrary decisions by the likes of Google and Apple.

This includes app removals and suspensions, which have a potentially severe impact on a developer's business.

The legislation goes by the catchy name "on promoting fairness and transparency for business users of online intermediation services" where "intermediation services" could include price-comparison sites, search engines, and application stores. The text appeared in two parts: a preamble that explains the background, rationale and intent, then the actual articles of law.

The EU noted that "online intermediation services can be crucial for the commercial success of undertakings who use such services to reach consumers,” which is an understatement, if anything, given the impact of such services on many businesses.

Market dominance by intermediaries

Whether or not intermediaries are a net benefit either to businesses or consumers is a complex question. Choice, user reviews and easy access to price comparisons are benefits, but the intermediaries like to be paid, which means less of your money going to the provider of the actual goods or services. Intermediaries may promote the deals that make them the most money, above those which are better for the purchaser.

Comparison sites focus attention on price rather than quality of service, forcing vendors to compete on price, and leading to undesirable outcomes such as insurance companies punishing renewal customers with high prices to subsidise lower prices for new customers. There is also a power shift towards the intermediaries, which leads to situations where companies have to purchase ads for their own brand name to avoid clicks going to competitors when their customers try to find them online.

Such factors and more are summarised by the EU in the remark: "Providers of those services often have superior bargaining power, which enables them to, in effect, behave unilaterally in a way that can be unfair and that can be harmful to the legitimate interests of their businesses users and, indirectly, also of consumers in the Union."

The legislation is far from comprehensive, though, and the EU said that "a targeted set of mandatory rules should be established at Union level to ensure a fair, predictable, sustainable and trusted online business environment within the internal market."

One aspect that has caught the attention of software developers is the ability of online stores to "restrict, suspend or terminate the provision of its services to a given business user, including by delisting individual goods or services of a given business user or effectively removing search results."

This can be a severe issue for developers who find themselves removed from the App Store or Play Store at short notice and with little ability to discuss the matter with Apple or Google.

Examples where apps are removed from Google's Play Store or the developer's account terminated apparently without good reason crop up regularly. In May, Podcast Addict was banned and reinstated after a social media outcry, and when a Google VP apologised on Twitter, the response was a chorus of complaints about a system that is "catastrophically badly broken".

The EU stated in clause 23 of the preamble to the new law that "the provider of online intermediation services should provide the business user concerned with a statement of reasons on a durable medium, at least 30 days before the termination of the provision of the whole of its online intermediation services enters into effect."

The law also requires that providers such as Google should "allow an opportunity to clarify the facts that led to the decision" in order to help its customers re-establish compliance.

That said, provision was made for exceptions to the 30-day notice for various cases including illicit content, counterfeiting, fraud, malware, spam, data breaches, and "other cybersecurity risks". Another exception is for cases of repeated infringement of terms and conditions.

This is a get-out clause since the most common reason for bans appears to be algorithmic efforts to discover exactly these kinds of issue. The outcome will be that apps get banned immediately and possibly reinstated after review, if the developer can persuade the store provider to give the matter some human attention.

The EU has also required search engines to "provide a description of the main parameters determining the ranking of all indexed websites and the relative importance of those main parameters as opposed to other parameters," but again with a get-out that "providers of online intermediation services or of online search engines should not be required to disclose the detailed functioning of their ranking mechanisms, including algorithms, under this Regulation."

This may mean that nothing will change: Google will argue that it provides abundant guidance to web designers and will still not reveal how its ranking is determined. It is a tricky issue since complete knowledge of ranking algorithms would not only reveal commercial secrets, but also make it easier to manipulate the results.

A couple of things are apparent, though. One is that the EU is at least attempting to regulate the behaviour of internet intermediaries in ways that tilt the balance of power a little more in favour of businesses and consumers. Second, developers lucky enough to be in the EU and suffering from unreasonable store bans or account closures now have some legislation to point to.

We have asked Apple and Google how the legislation impacts their policies and will report back with any comment received. ®