Two years ago, the European Union’s flagship Digital Markets Act (DMA) took effect. The DMA promised to make platform markets “fairer and more contestable” for the businesses that rely on them to reach consumers by imposing a set of brightline mandates on designated gatekeepers.
In the United States, advocates of DMA-style competition rulemaking include former Federal Trade Commission (FTC) Chair Lina Khan and Sen. Amy Klobuchar (D-Minn.), whose American Innovation and Choice Online Act (AICOA)—which Congress has not enacted—closely tracks the DMA’s approach. Supporters argue that brightline rules lower enforcement costs and provide greater certainty for regulators and firms than case-by-case antitrust litigation against large technology companies. U.S. antitrust law, by contrast, generally requires enforcers and private plaintiffs to prove that a defendant possesses and has abused market power and that the challenged conduct produces net anticompetitive effects. Brightline regimes such as the DMA aim to bypass these showings altogether.
The ongoing battles between mobile app developers and competition authorities over Apple’s so-called anti-steering policies—fought in U.S. courts and before European regulators—put that case for digital platform rulemaking under strain. These disputes suggest that rigid rules do not necessarily simplify enforcement or align with the interests of the very developers who have lobbied for them.
This article examines app-store policies that restrict developers’ ability to inform users about, or direct them to, alternative payment options outside an app store’s proprietary in-app payment system, such as transactions completed on a developer’s own website. Part II compares how those policies fare under the DMA’s brightline, ex ante prohibitions with their treatment under the more flexible, effects-based framework of U.S. federal and state antitrust law.
App-Store Duopoly and the Anti-Steering Fight
As the 2021 Epic Games v. Apple decision from the U.S. District Court for the Northern District of California made clear, Apple’s App Store and Google Play together form a duopoly in mobile app distribution. Apple’s U.S. market share alone was estimated at between 52% and 57%. Each app store sits within a broader mobile software ecosystem tied to its operating system. These platforms give developers access to consumers’ mobile devices and aim to deliver secure, trusted environments and seamless user experiences for user–developer transactions and interactions.
In-app transactions—such as purchases of “skins” and other digital items in video games like Epic Games’ Fortnite—represent a major revenue source for developers. The dominant app stores also generate revenue from these transactions by requiring developers and users to process them through proprietary payment systems, while charging substantial commissions.
Apple and Google further restrict developers’ ability to “steer” users to external offers or alternative payment portals—often referred to as “linked-out” transactions—by limiting in-app communications about those options and, in some cases, by imposing fees on linked-out transactions themselves. Linked-out transactions allow developers and users to bypass the platform’s payment system and its associated commission. Because declining to comply with App Store or Google Play policies effectively means surrendering access to a primary channel for reaching a large share of existing and potential customers, critics argue that the app stores wield significant power to raise commissions on in-app transactions at the expense of developers and consumers. As of this writing, Apple charges commissions ranging from 15% to 30% on in-app transactions in the United States, depending on a developer’s size.
Developers contend that anti-steering rules and high transaction fees harm consumers and competition by weakening incentives to innovate, suppressing transaction volume, and depriving users of the information needed to make informed choices. Apple responds that restrictions on steering protect users from less secure or less trusted payment systems and external websites, thereby preserving the privacy, security, and integrity of the iOS ecosystem that consumers expect. Apple also maintains that its commissions fund the maintenance and improvement of the app-distribution infrastructure from which both developers and users benefit, including secure payment systems, privacy protections, and anti-fraud measures. In Apple’s view, curtailing its ability to charge for in-app transactions would undermine its incentives to invest and innovate, while allowing developers to “free ride” on the broader mobile device and software ecosystem without compensating the platform.
Scrutiny of anti-steering policies extends well beyond the United States and the EU. Competition authorities in jurisdictions such as Japan, South Africa, the Netherlands, and Brazil have launched investigations, overseen litigation, or imposed sanctions challenging similar practices. Analytically, these policies resemble vertical restraints: limits imposed by firms that facilitate transactions between other actors in the supply chain to advance a particular business objective. Although vertical restraints can restrict competition, many generate ambiguous or mixed effects and may yield net procompetitive benefits. U.S. antitrust law therefore evaluates them under the rule of reason, weighing evidence of anticompetitive harm against procompetitive justifications to determine legality on a case-by-case basis.
Multisided Markets and the Amex Framework
The leading U.S. antitrust decision on anti-steering provisions in transaction-platform markets is 2018’s Ohio v. American Express Co. In Amex, the Supreme Court affirmed a 2016 appellate ruling addressing competition within a single, multisided credit-card transactions market. That market governs interactions between cardholding consumers and merchants that accept cards and rely on payment networks. Because the platform’s function is to facilitate exchanges between these two groups, the relevant product was the transaction itself. Both sides benefit from the platform’s intermediation.
At issue was American Express’ prohibition on merchants steering customers toward competing cards that charged lower merchant fees, whether through price discounts or other inducements. Ohio and several other state attorneys general alleged that these anti-steering rules constituted an unreasonable restraint of trade under Section 1 of the Sherman Act. The states sued American Express after settling similar claims with Visa and Mastercard over their own steering restrictions.
The Court evaluated the claim that American Express’ policy reduced price competition among card networks for merchant fees, which, plaintiffs argued, could have translated into lower consumer prices. Even assuming reduced fee competition, the Court upheld the policy. It emphasized that the restrictions increased transaction volume and that merchant fees funded cardholder benefits, including rewards programs, security, and anti-fraud protections. The plaintiffs failed to show net competitive harm in the multisided transactions market because they bore the burden of proving harm to both merchants and cardholders.
Several factual findings proved decisive. The courts concluded that anti-steering rules had not reduced transaction output, that merchants remained free to stop accepting American Express cards if fees proved too high, and that Visa and Mastercard did not lower their own merchant fees after abandoning similar restrictions—even at merchants that did not accept American Express. Those facts undermined the claim that eliminating anti-steering would benefit consumers or merchants through lower prices. This remained true despite American Express holding a 26.4% share of transaction volume, in part because cardholders typically carry multiple cards and can switch among them at the point of sale.
App-store anti-steering policies differ from those at issue in Amex in several important respects. Apple and Google command far higher market shares in mobile app distribution. Switching ecosystems—such as moving from an iPhone to an Android device—or seeking alternative payment options outside an app store is far more costly and cumbersome than choosing among credit cards already in a consumer’s wallet. Most consumers do not use multiple mobile devices across competing platforms. Cardholders also generally understand the features and fees of their cards far better than app users understand alternative in-app payment options. As a result, limiting developers’ ability to inform users about external payment options is more likely to impair informed consumer choice than preventing merchants from advertising lower card fees.
At the same time, the app-store cases echo Amex in one critical respect: commissions can finance platform investments that benefit both users and developers. App-store fees help support security, user experience, and anti-fraud protections that encourage users to rely on the platform, thereby expanding the potential audience for developers. In this sense, both forms of anti-steering can strengthen network effects, increasing a platform’s value as participation grows. Under U.S. antitrust law, if a plaintiff succeeds in demonstrating anticompetitive effects affecting both sides of a transaction platform—something the plaintiffs failed to do in Amex—courts must then weigh those harms against any output-reducing effects of the challenged commissions.
These considerations frame the antitrust analysis within the relevant market. As a separate matter, policymakers evaluating the broader economic effects of antitrust rules should also account for the unintended consequences that may follow from constraining a firm’s ability to monetize its platforms and properties.
Scale, Spillovers, and the Economics of Platform Investment
Large technology firms such as Apple, Amazon, Meta, and Google operate across multiple lines of business and routinely redeploy revenue, expertise, and scale from established markets to enter new ones. They commit billions—sometimes trillions—of dollars to capital investment and R&D, including high-risk “moonshot” projects with uncertain commercial prospects but potentially outsized returns. That risk tolerance depends on revenue streams and profit margins generated by existing products and services.
Apple offers a clear illustration. It finances data centers, custom semiconductor platforms, renewable energy projects, and undersea cables. These investments do not merely support Apple’s own operations; they also generate substantial spillover benefits for the broader digital economy. As Hilal Aka, a former policy analyst at the Information Technology and Innovation Foundation (ITIF), has observed:
The leading five U.S. technology companies—Amazon, Apple, Alphabet, Meta, and Microsoft—invested $227 billion in R&D in 2024. This exceeds the $172 billion U.S. federal R&D budget and the total annual R&D expenditure of most countries in 2023.
That scale gives these firms a capacity to fund innovation that far exceeds traditional public or private R&D sources. Apple’s development of proprietary silicon chips underscores the point. Building a custom semiconductor platform required multibillion-dollar investments over many years to produce chips optimized for evolving AI workloads and software demands. Vertical integration over hardware and software enables performance gains, energy efficiency, and tighter system integration that benefit Apple’s current offerings and future lines of business. Apple’s R&D spending now exceeds that of specialized chipmakers such as Qualcomm, AMD, Intel, and Nvidia, reflecting the magnitude of these commitments.
Antitrust enforcers often warn that firms operating across multiple markets can “leverage” dominance in one line of business to harm competition in another. In practice, entry by such firms frequently intensifies competition. New entrants with scale and expertise pressure incumbents to cut prices, expand output, or innovate to maintain market position, to the benefit of consumers. U.S. antitrust doctrine reflects this reality. Courts, including the 7th U.S. Circuit Court of Appeals, have rejected “monopoly leveraging” as a standalone violation of Section 2 of the Sherman Act absent specific exclusionary conduct, such as predatory pricing, refusals to deal, or tying. Even then, courts assess those theories under fact-intensive, case-by-case analysis.
Conventional antitrust analysis, aside from the remedial phase, typically evaluates individual lines of business in isolation and discounts potential gains to competition and innovation in adjacent or future markets. Courts and enforcers often view claims about long-term or speculative innovation benefits with skepticism, particularly when those benefits have yet to materialize. Policymakers and enforcement agencies, though, operate under resource constraints and must decide which cases to bring and which remedies to pursue. In that setting, limits on how platforms such as Apple may use or monetize their assets—including price controls or rigid conduct mandates—risk constraining future investment and innovation in ways that ex post analysis may never fully capture, even when those limits are authorized by specific statutes or regulatory regimes.
