Appy Talk

This article from Dr. Daithí Mac Síthigh on the regulation of apps, with its special focus on Apple’s own approach, gives the flavour of his much praised presentation at SCL’s 6th Annual Policy Forum held in September 2011.

The growth in popularity of the 'smartphone' has been an important feature of the mobile phone and computer industries over the past few years.[1]  Ofcom reports that a quarter of phones in use in the UK are smartphones, but that proportion rises to half in the case of users aged between 16 and 24.[2]  One of the consequences of this shift from phone to smartphone has been the development of the market for 'apps', which is the subject of this article.  

For present purposes, apps are the applications which run on a smartphone.   In general, they are distributed through large retail platforms such as the Apple App Store or the Android Market.  Some apps are free, others require the payment of a fee for download, and an important third category is apps that are free to download but require in-app payment.  On Apple's platform alone, the top 200 free applications are downloaded over 6 million times per day in the US;[3] it is estimated that 29 billion app downloads (across all platforms) were recorded in 2011.[4] 

Apps present an interesting challenge for those interested in the balance of power in information technology law, eg as between end-users and hardware manufacturers.  Around the time that smartphones were starting to take off, US law professor Jonathan Zittrain wrote about the importance of 'generativity' in relation to technology.[5]  A generative device, he argued, was one which allowed the user to make use of it in various ways and to various ends (like a PC), as opposed to a 'tethered' appliance (like a personal video recorder), which is generally limited in its functionality to the uses contemplated and/or permitted by its manufacturer.  Similarly, the theme of the importance of intermediaries has been the subject of a stream of academic articles.[6]  So the birth of the app became an opportunity to consider these theories, particularly as different app platforms took different approaches to how the store would be governed. 

Control matters.  From the point of view of the phone manufacturer or provider, a controlled environment for apps means that the user will have a good experience of using the phone, with third-party apps being seamlessly integrated into the interface and operating system.  There are financial reasons why close cooperation with third-party developers may be important, too.[7]  From the point of view of a third-party developer, though, the priority may be to develop an app that does what the user wants it to do, or to 'port' an application from one platform to another.  They too will wish to deal with payments and subscriptions in an appropriate fashion.   

Disputes between app platforms and third-party developers have proceeded along fairly predictable lines.  Here, we will consider a number of examples, primarily drawing from Apple's system.  The reason for this is that Apple has taken a deliberate, conscious decision to 'police' its App Store, and has therefore been the field of battle for many disputes.[8]  Nonetheless, to borrow from the old line of the BBC, other platforms are available, and indeed we do find simpler policies (eg Android Market), and those which are reactive rather than proactive.  These platforms, in turn, can find themselves criticised for being too open.[9]  The App Store operates a preapproval process and it is this process which tends to lead to cries of outrage at the 'rejection' of an app. 

An app must meet specified requirements (App Store Review Guidelines) if it is to be accepted in the App Store.  These apply whether the app is being made available for a fee or free of charge.  An iPhone or similar device, without modification, can only be used to download or run applications made available to App Store, so acceptance is a critical part of any developer's strategy.  These guidelines are wide-ranging and far-reaching.   

Examples include: 

·       use restrictions (guideline 2.4, no use of location features to control vehicles or aircraft)

·       quality requirements (2.11, duplicates may be rejected; 2.12, apps 'not very useful' or not providing any 'lasting entertainment value' may be rejected)

·       payment rules (section 11, in-app purchases must use the In App Purchase API, but the API cannot be used to purchase non-app goods or services). 

The guidelines also entail a form of content regulation. Apps that are 'defamatory, offensive, mean-spirited, or likely to place the targeted individual or group in harms way' will be rejected.  Of course, while defamation may be an issue for litigation, mean spirits (without more) are unlikely to trouble the courts.  In reaction to controversial deletions,[10] the guidelines now provide, curiously, that 'professional political satirists and humorists are exempt from the ban on offensive or mean-spirited commentary'.  One wonders how professional is to be interpreted in this context.  Of particular significance to the burgeoning smartphone games sector is guideline 15.3, which prohibits in-game 'enemies' from being a real government or corporation.  These guidelines are added to from time to time, such as the new guideline 22.8 on the publication of drink-driving checkpoint information, inserted in response to criticism from senators in the United States. 

Given the popularity of smartphones with younger users, and the success of games like Angry Birds, the application of age rating has also been an issue of concern regarding app platforms.  In the UK, the Video Recordings Act 1984 (which provides that some games require statutory classification) does not extend to games other than those supplied in physical format (eg on a disc or cartridge).[11]  The recent amendments to the Act,[12] which will extend the criteria for classification and provide for the designation of a separate video games classification authority, do not change this situation.  Hence, voluntary schemes are of particular importance. Apple's app rating scheme is one of four categories: 4+, 9+. 12+ and 17+.  Eagle-eyed readers will note that these categories do not map to any of the existing statutory or self-regulatory schemes in operation in the UK or elsewhere.   

So why is the interventionist role of Apple tolerated?  From Apple's point of view, it explains that although it may sometimes seem like they are control freaks (their phrase, not mine), 'maybe it's because we're so committed to our users and making sure they have a quality experience with our products'.  The CEO of Rovio (responsible for Angry Birds) explains that smartphones have an advantage over previous generations of phones-as-platforms as the phone company has much less influence over the range of games that are available.[13]  And a vice-president of Skype noted that the customer experience is enhanced by avoiding a 'total free for all'.[14]  Taken together, we see that while the user or scholar may be critical of the move away from Zittrain's generativity, some of the affected developers see it as a better solution for them. 

Dissatisfied developers are not without an opportunity to strike back.  Some of this is played out through the media, and app platform guidelines are now more available than they were at launch (although still not as readily available as they perhaps should be).  Others choose to step outside of the App Store, such as the Financial Times did, so as to avoid having to comply with Apple's requirement that payments go through its system (with Apple retaining 30%).[15]  Apple has introduced a 'Review Board' to deal with developer appeals.  In certain situations, there may be legal remedies too.  The FCC investigated the rejection of Google Voice on competition grounds.[16]   

Yet regulation from a different angle is also under consideration, with Ofcom scrutinising the use of apps as payment mechanisms for audience participation,[17] and PhonePayPlus (the regulator for premium rate services) considering how its remit can be effective when PRS is just one of a number of forms of 'micropayment'.  A subset of apps, those providing access to 'TV-like' audiovisual content, may fall under the jurisdiction (albeit limited to a small number of regulatory requirements) of the new Authority for Television on Demand.[18] 

The market for apps appears healthy, and it no longer appears as if Apple is the only platform.  Yet even those other platforms cannot fail to observe the difficulties faced by a platform operator in balancing its different roles, as retailer, OS and/or hardware developer, 'brand' and more.  Apple (and others) clearly go beyond legal requirements in restricting what is allowed to be distributed, although it will also hear complaints from pressure groups when an offensive or controversial app is approved.  The debates on the duties and rights of web hosts are useful here, although it is important to note that the role here is well beyond that of a host, particularly when there is a financial link between the platform operator and the app developer.  Indeed, if one combines all the ethical and legal conundrums of web hosting with the ongoing debate on the economic and social role of large supermarkets (towards suppliers and customers), we can start to see how the powers and responsibilities of those who run app stores deserve much more attention than this short piece alone.  As smartphones continue to take the place of what I presume are now to be called 'dumbphones', the challenge of app regulation will become unavoidable. 

Dr. Daithí Mac Síthigh is a lecturer at UEA Law School, University of East Anglia. He is also the author of the well established legal blog Lex Ferenda.

 

 



[1] See for example the 2009 Business Week cover story: D MacMillan, 'Inside the app economy' (Business Week 22 October 2009); J Grimmelmann, 'Owning the stack: the legal war to control the smartphone platform' (Ars Technica September 2011) http://arstechnica.com/tech-policy/news/2011/09/owning-the-stack-the-legal-war-for-control-of-the-smartphone-platform.ars.

[2] Ofcom, 'Communications Market Review 2011' http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr11/UK_CMR_2011_FINAL.pdf 47.

[3] http://www.fiksu.com/resources/fiksu-indexes

[4] http://www.abiresearch.com/press/3799-Android+Overtakes+Apple+with+44%25+Worldwide+Share+of+Mobile+App+Downloads

[5] J Zittrain, The future of the Internet – and how to stop it (Yale University Press, 2008).

[6] E.g. E Laidlaw, 'A framework for identifying Internet information gatekeepers' (2010) 24 Int'l Review Law Computers & Technology 263.

[7] M de Reuver, 'Governance of mobile service innovation after the walled gardens' (2011) 13 info 43, 44.

[8] J Wortham, 'Apple bans some apps for sex-tinged content' (New York Times 22 February 2010)

[9] C Arthur, 'Developers express concern over pirated games on Android Market' (Guardian 17 March 2011) http://www.guardian.co.uk/technology/blog/2011/mar/17/android-market-pirated-games-concerns

[10] R Singer, 'Apple App Store bans Pulitzer-winning satirist for satire' (Wired 15 April 2010) http://www.wired.com/epicenter/2010/04/apple-bans-satire/.

[11] D Mac Síthigh, 'Legal games: the regulation of content and the challenge of casual gaming' (2011) 3 Journal of Gaming & Virtual Worlds 1.

[12] Digital Economy Act 2010, ss 41-42.

[13] M Cohen, 'Angry Birds CEO: we really have Apple to thank' (LoopInsight 28 February 2011) http://www.loopinsight.com/2011/02/28/angry-birds-ceo-we-really-have-apple-to-thank/ 

[14] Westminster eForum, 'Smartphones, tablets and apps' (1 March 2011)

[15] A Egecliffe-Johnson, 'FT's new web app bypasses need for iTunes' (Financial Times 7 June 2011); J Abell, 'Cause and effect? FT ditches the App Store, digital subs increase' (Wired 3 November 2011) http://www.wired.com/epicenter/2011/11/cause-effect-ft-subs-increase/.

[16] J Croft, 'Mobile computing: why you may never see some great apps' (2010) AIPLA Antitrust News http://ssrn.com/abstract=1601089.

[17] Broadcast Bulletin 169 (8 November 2010) 5-6.

[18] http://www.atvod.co.uk; designated by Ofcom under part 4A of the Communications Act 2003 (as inserted by SI 2009 No. 2979).

Published: 2012-02-06T20:31:55

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