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App Stores Are Protecting Consumers

In many policy-making circles, app stores face significant hostility. Critics say that gatekeepers such as Google Play and Apple’s App Store place unreasonable restrictions on third-party app developers.

However, this line of reasoning gets it all backwards. It’s true that app stores (and other gatekeepers) dictate rules for third parties who want to sell through them. But this system provides great benefits to consumers – not least by excluding nefarious apps and developers. Plus, there is no logical reason why a company shouldn’t have control over how they want to legally conduct business.

Apple, which has built much of its branding on its restrictive (and highly secure) “walled garden,” demonstrates how app stores intermediate between developers and consumers. In a recently published report, the company says that, “In 2023, more than 1.7 million app submissions were rejected for various reasons, including privacy violations and fraudulent activity.” Moreover, the company “terminated close to 118,000 developer accounts” and turned down “more than 91,000 developer enrollments.”

While imperfect, app stores place a high barrier between users and risky software, preventing significant monetary and other harms. According to Apple’s report, the company thwarted more $1.8 billion in potential fraud in 2023, and more than $7 billion from 2020 to 2023. Due to the complexity of online ecosystems (and cybercriminals increasing sophistication) the average consumer simply lacks the ability to remain safe from bad actors without help.

The benefits of online platforms acting as intermediaries extend beyond app stores. For example, after a game developer sold access to Helldivers 2 under deceptive terms, gaming platform Steam stepped in and issued immediate refunds to its dissatisfied users. Without Steam taking the initiative, users would likely have needed to navigate a far longer and more arduous process of interfacing with the developer.

Regulators who see anti-competitive practices around every corner should take note of the consumer benefits that app stores and other online platforms provide. Although their business models might deviate from regulators’ preferences, platforms evolved to their current forms largely in response to consumer choice. Tilting at antitrust windmills might protect specific competitors within specific markets, but it will leave users worse off.

Published on May 20, 2024