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Biden’s plan to curb credit-card late fees could undercut Apple, Google app stores

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President Joe Biden’s push to curb credit-card late fees means consumers could expect lower prices charged by Apple Inc. and Alphabet Inc.’s Google on their mobile app stores, and more competition on digital platforms.

As part of Biden’s plan to eliminate “junk fees” associated with consumer services for concert tickets, mobile plans and air travel, the Consumer Financial Protection Bureau is expected to propose a rule to take effect in 2024 that would to cap late payment credit-card fees at $8, from an average now of about $31 — saving consumers about $9 billion a year in fees.

“The bottom line is these unfair fees add up. It’s a basic question of fairness,” Biden told reporters at the White House on Wednesday.

Biden was joined by CFPB Director Rohit Chopra, who said excessive fees far exceeded any additional costs that lenders incurred. “What I think we also see is companies using inflation as an excuse to raise fees even more, and that is wrong,” Chopra said.

The National Telecommunications and Information Administration, an arm of the Commerce Department, issued a report Wednesday that echoed the criticism of developers about the app-economy market dominance of Apple and Google, saying that the current app-store model inflates prices and stifles innovation.

“The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from fees for access to functional restrictions that favor some apps over others,” the report said.

“Consumers largely can’t get apps outside of the app-store model, controlled by Apple and Google,” the report concluded. “Apple and Google create hurdles for developers.”

The report prompted sharp responses from both companies.

In a statement, an Apple
spokesperson said while the report “acknowledges the importance of user privacy, data security and user convenience,” some of its conclusions “ignore the investments we make in innovation, privacy and security.”

A Google

spokesperson countered its Android system “enables more choice and competition than any other mobile operating system.”

Credit: marketwatch.com

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