The 'App Store Freedom Act' Forces Tech Giants to Open Ecosystems and Drop Mandatory Payment Fees

The App Store Freedom Act is a big move aimed squarely at the handful of massive tech companies that control the operating systems (OS) and app stores on our phones and computers. Essentially, this bill says: If you run an OS and have an app store with over 100 million U.S. users, you have to stop locking down your platform. It demands that these "covered companies" allow users to easily pick a different default app or even install entirely separate app stores, and it bans them from stopping users from installing apps outside of their official store.

Breaking the Payment Gate

This is where the bill hits the wallets of both developers and, eventually, consumers. Right now, many of these covered companies force developers to use their proprietary in-app payment systems, often taking a hefty cut (sometimes 30%) of every transaction. This bill, under Section 2, specifically bans that practice. A covered company cannot make it a condition of being on their platform that a developer must use the company’s payment system. They also can’t punish a developer for selling their app elsewhere or using a different payment method. Think of a small game studio: if they can use a cheaper payment processor, they save money, which might mean they can charge less for their app or invest more in development.

Fair Access to the Digital Plumbing

Another major piece of Section 2 requires these tech giants to give third-party developers access to the same hardware, software, and OS features that the tech giant uses for its own apps. This is critical because for years, developers have complained that the platform owners give themselves a head start by having early or exclusive access to new features—like a new camera API or a secure payment chip function. This law demands that access be granted quickly, without extra fees, and on the exact same terms. If a developer needs documentation to make their app work seamlessly with the phone’s latest features, the OS owner has to hand it over.

There’s a slight catch here, though. The bill says the OS owner is compliant if they either license the necessary intellectual property (IP) or, alternatively, if they limit the features available to everyone (including themselves) to only those that don’t involve that specific IP. If the company chooses the latter, developers might get equal access, but the overall capability of the OS could be limited, potentially leading to fewer cool features for users.

What Happens When Things Go Wrong?

If you’re a consumer, you gain a lot of freedom here—you can download an app store run by a small company or install an app directly from a developer’s website. But Section 5 has an important clause: the covered company is not required to honor hardware or software warranties, or provide customer service, if the problem was caused by an app or app store installed outside of their official channel. So, if you download a third-party app store and it messes up your phone’s performance, you’ll be talking to the developer, not the phone manufacturer. This shifts the support burden (and risk) squarely onto the user and the third-party developer.

The Enforcement Hammer: $1 Million Per Violation

This law isn't just a suggestion; it has serious teeth. Section 3 puts the Federal Trade Commission (FTC) in charge of enforcement, treating violations as if they were unfair or deceptive practices under the FTC Act. On top of standard FTC penalties, any covered company that breaks this law faces an additional civil penalty of up to $1,000,000 for every single violation. This is a huge deterrent and gives the FTC significant new punitive power. Furthermore, State Attorneys General can also sue to protect their residents, though the FTC or federal action takes precedence if a case is already underway. This dual-layer enforcement mechanism means these companies will be under heavy scrutiny.