Report | Towards Regulating App Stores
A survey of the mobile apps and ecosystem & regulatory developments worldwide.
The Alliance of Digital India Foundation (ADIF) – an industry body for India’s digital startups – has compiled a survey of the mobile apps ecosystem and regulatory developments worldwide. The report, titled 'Towards Regulating App Stores' has been prepared by ADIF and The Quantum Hub, and will be released on Wednesday, May 18. Through this report, we want to bring to your attention one of the many ways in which big tech companies are affecting India’s technology ecosystem – through the app stores.
Apple and Google are the owners of App Store and Google Play, which are the gateways through which users search, download and purchase apps on iOS and Android OS, respectively.
App stores charge a fee for the services they provide, such as app review and discovery, safe download, access to a consumer market for developers, and app development help, among other things.
This charge, which is typically modelled as a fixed rate of commission on paid app and in-app purchase (IAP) transactions, is intended to pay the expenses of delivering these services. The commissions charged differ based on the sort of app and, in certain cases, the jurisdiction in which it runs. Depending on the type of programme, the Apple App Store charges a 15 or 30 percent fee on purchased applications and IAP transactions. Similarly, Google Play charges either 15% or 30%, although until recently, this was not properly enforced.
Several Indian developers have protested the size of the commissions and the lack of options for payment systems, calling the planned policy change ridiculous. They have also complained about the app stores' monopolistic policies and their use of market power to impose unfavourable conditions on developers. Because app stores are inherently related to the operating system, they are sometimes the only way for developers to access their target audience. Developers have no choice but to comply as a result.
The report covers some of the contentious policies of the dominant app stores, the effects of app store policies on the mobile app market, international developments in app market regulation, and the limits of antitrust regulation. Considering the market power wielded by Apple and Google over mobile digital distribution platforms, there is an urgent need to ensure fair competition and improve choices for both developers and consumers.