It's a high-profile pledge to convince the FTC to approve its takeover.
Smith made the announcement while revealing a set of Open App Store Principles that Microsoft is establishing for Windows and future gaming marketplaces it's building for games. He wrote that the company is bringing in the measures as it seeks regulatory approval for the Activision Blizzard deal and as governments "move forward with new laws to promote competition in app markets and beyond. 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."
The Federal Trade Commission is reportedly reviewing the Microsoft-Activision Blizzard buyout rather than the Department of Justice (the FTC doesn't comment on investigations). The deal could face more scrutiny than in would have from the DOJ. The FTC last year said it would take a more aggressive approach toward merger and acquisition investigations under chair Lina Khan, a noted critic of Big Tech. Smith said that Microsoft wants to address every potential question regulators have in relation to the acqusition.
Microsoft is establishing its new principles in line with app store legislation that jurisdictions such as the US, European Union, the Netherlands and the Republic of Korea are considering. Smith said that Microsoft's tenets will "ensure we’re providing the best possible experience for creators and customers of all sizes."
The Open App Store Principles relate to commitments in four key areas. In terms of Quality, Safety, Security and Privacy, Microsoft says it will let all developers use its app store as long as they meet certain levels of quality and safety; ensure developers meet certain levels of security; and respect customer privacy.
Under a section on Accountability, Microsoft pledged to make sure it holds its own apps to the same standards as those built by other companies and to refrain from using non-public information and its app store data to compete with other apps. As part of its Fairness and Transparency commitments, the company says it will treat all apps equally in its store (i.e. "without unreasonable referencing or ranking of our apps or our business partners’ apps over others") and be transparent, consistent and objective about app store promotion and marketing rules and how it applies them.
Smith said that, partly due to app store legislation not being written specifically for gaming consoles, only the first three sections of the principles will apply to Xbox in the immediate future. "Beginning today, we will move forward to apply Principles 1 through 7 to the store on the Xbox console," Smith wrote. "We’re committed to closing the gap on the remaining principles over time."
The fourth section is called Developer Choice. The company says it won't force developers to use its payment system for in-app payments or to make them offer more favorable terms on the Microsoft Store than other platforms. Microsoft claims it won't "disadvantage developers if they choose to use a payment processing system other than ours or if they offer different terms and conditions in other app stores." Finally, developers will be allowed to communicate with customers through their apps "for legitimate business purposes, such as pricing terms and product or service offerings."
Other commitments include enabling Windows users to have access to whichever app stores and third-party they like, and to select default apps for various purposes.
These tenets will have a far-reaching impact on Microsoft beyond the scope of its gaming division, and potentially the tech industry at large. The Developer Choice section, for one thing, addresses concerns in a bill called the Open App Markets Act that's set to go to a vote on the Senate floor.
The bill aims to block app marketplace owners with more than 50 million users from forcing developers to use their built-in payment systems for in-app payments (which Apple's App Store and the Google Play Store currently both do). The legislation would, among other things, require app store operators to let developers contact users with "legitimate business offers, such as pricing terms and product or service offerings" — Microsoft used almost identical wording in its new principles.
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