Microsoft announces new rules for app stores

Microsoft announced new rules for its app stores on Wednesday, as regulators consider the company’s plans to acquire gaming company Activision Blizzard. 

Microsoft’s new Open App Store principles mirror guidelines that Congress is looking to pass to regulate Apple and Google’s dominant app stores, and will be applied across the Microsoft Store on Windows and to the “next-generation marketplaces we will build for games,” Microsoft President Brad Smith said in a blog post. 

The new rules are part of the company’s pitch to regulators weighing the company’s roughly $70 billion purchase of Activision Blizzard. 

“We have developed these principles in part to address Microsoft’s growing role and responsibility as we start the process of seeking regulatory approval in capitals around the world for our acquisition of Activision Blizzard,” Smith said. 

“This regulatory process begins while many governments are also moving forward with new laws to promote competition in app markets and beyond,” he added. “We want regulators and the public to know that as a company, Microsoft is committed to adapting to these new laws, and with these principles, we’re moving to do so.”

One of the new rules calls for Microsoft to allow developers to use payment systems outside of Microsoft’s own to process in-app payments, which has been a key issue app developers have raised against dominant app stores, specifically Apple. 

Microsoft’s rules also say it will not prevent developers from communicating directly with their customers through their apps to offer pricing terms or service offers, another point raised by app developers in their backlash to Apple and Google. 

Microsoft’s new rules come one week after the Senate Judiciary Committee advanced the Open App Market Act, with broad bipartisan support. The proposal would require Apple and Google to follow rules similar to the ones Microsoft laid out. 

Smith cheered the committee for advancing the legislation. 

Unlike Microsoft, Apple and Google, as well as industry groups backed by the tech giants, have pushed back on the proposal. They have argued that it could pose security risks. 

Google’s president of global affairs and chief legal officer Kent Walker specifically slammed Smith on Twitter over Microsoft’s lobbying for the bill. 

“Disappointing that Microsoft would lobby so hard for a law targeting its competitors, while carving out its own exception for Xbox, which requires its own billing system, doesn’t allow loading of other stores and actually charges higher fees to developers,” Walker tweeted. 

Smith, in Wednesday’s announcement, acknowledged that the new rules will not immediately apply to the current Xbox console store. 

The emerging legislation being considered is aimed at rules for the app stores on “platforms that matter most to creators and consumers,” including on personal computers and mobile phones, he said.

Smith argued the concerns raised on app stores for phones or computers are different than on app stores of specialized gaming consoles. 

“These platforms have become essential to our daily work and personal lives; creators cannot succeed without access to them. Emerging legislation is not being written for specialized computing devices, like gaming consoles, for good reasons. Gaming consoles, specifically, are sold to gamers at a loss to establish a robust and viable ecosystem for game developers. The costs are recovered later through revenue earned in the dedicated console store,” Smith said. 

But he said that Microsoft will “adapt” its business model for the Xbox store to apply some of the new rules to the console. The rules he said would be applied, however, do not include those that allow for developers to use alternative payment systems for in-app purchases.