Apple says competition changes could open door to scams

Australians could lose more money to fraudsters, miss out on cutting-edge tech features, and fail to see lower prices under changes proposed to boost competition on digital platforms.

US tech giant Apple issued the warnings on Friday, urging the government not to “follow a handful of untested laws” from other countries in its submission to a Digital Competition Regime consultation.

But experts say consumers could benefit from greater competition, with the pushback coming as Apple fights regulatory changes in Europe and the US that could force it to allow third-party payments without taking commissions.

Changes were proposed to rules governing digital platforms following the Australian Competition and Consumer Commission’s Digital Platforms inquiry, with consultation on regulations closing in February.

Australian businesses and consumers needed greater rights on digital platforms and up-front rules to govern their conduct, the consultation paper said, as a concentration of power could lead to “higher prices, reduced choice and lower innovation”.

Apple rejected these outcomes in its submission and, in a separate statement, insisted the company’s ecosystem helped developers and security features protected consumers from fraud and scams.

“We are concerned the proposed digital competition regime will chill this innovation and threaten user security,” the company said in a statement.

“We welcome the opportunity to continue engaging with the government on behalf of our Australian customers.”

In its submission, Apple objected to changes that would allow users to “side-load” third-party apps onto their devices, force the company to accept third-party payments without commissions, and demand interoperability with other platforms.

Australian regulators should create their laws rather than use other countries’ rules as a template, the submission said.

“Apple believes the ultimate framework should be tailored to the needs of Australian consumers and businesses, rather than follow a handful of untested laws in other jurisdictions that could pose significant unintended and negative consequences if implemented in Australia,” the submission said.

The European Union’s Digital Markets Act had delayed the launch of AI features on Apple devices, the company said, and forced it to permit pornographic and torrenting apps on its platform.

Both the European Commission and US courts are demanding Apple change its policies and accept third-party in-app payments without commissions following the act and a court case launched by Fortnite creator Epic Games.

Changing laws to bring more competition to platforms would benefit Australian consumers, Telsyte managing director Foad Fadaghi said, although he warned many users were unlikely to change their iPhone settings or install unapproved software.

“The European experience has shown that most people keep the default settings even as the platform does open up,” he said.

“Apple users tend to value the security and privacy of the platform.”

Changes proposed in the Digital Competition Regime included preventing tech companies from prioritising their products, removing payment restrictions, and mandating timely app approval processes.