Julian Wright, Professor of Economics at the National University of Singapore, kicked off the conference with a keynote address showing how economic theory supports interventions designed to facilitate app store competition, and the guardrails that should be in place for competition to deliver benefits to consumers.
Lawmakers and courts across the EU, UK, US, Japan, Australia, Canada, and Brazil are considering or imposing changes on the two app stores that dominate mobile operating systems, Apple’s App Store and Google Play. App stores are characterized by high commissions and restrictions on third-party app stores and alternative payment processors for in-app purchases.
Wright explained how Apple and Google exploit a “competitive bottleneck” in app distribution. Consumers typically use a single mobile operating system—iOS or Android—giving mobile platforms monopoly-like power over developers who need to reach those consumers. Economic theory shows that this leads to excessive commission fees, self-preferencing, and anti-steering measures. The problem is compounded because platforms are complements for developers, meaning high commissions by one platform also harm the other, creating additional pressure toward excessive fees across the board.
Wright showed how enabling genuine competition in app distribution markets – by allowing alternative app stores, direct downloads from the web, developer steering, and alternative payment solutions – could change these dynamics. Write cited existing game marketplaces like the Epic Games Store as examples to show how this can work in practice. For competition to succeed, however, policymakers must prevent dominant mobile operating systems from taxing or degrading third-party app stores through price squeezes, exclusivity requirements, discrimination, tying, or friction-inducing “scare screens.”
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