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Why Apple and Google's App Store monopoly may end soon

New rules on mobile app stores could lead to a wave of creative apps that are less expensive with more privacy options for users. Every budding developer dreams of creating an app that goes viral and makes a lot of money overnight. Angry Birds became a global phenomenon in a matter of weeks when it was launched in 2009 and made $10m (£8m) in its first year.

But overall, the numbers show that mobile apps do not guarantee wealth. A 2021 study showed that only 0.5% of consumer apps are commercially successful. Developers must vie for attention between the nearly 3 million apps and games on Google Play and the 4.5 million apps and games on the Apple Store.

On the Apple iPhone and iPad platforms, the App Store is the only way to distribute apps. Until recently, Apple and Google stores were charging 30% commission. But they both cut it in half for most independent app developers and small businesses after lawsuits like in 2020 when video game company Epic Games claimed Apple had an illegal monopoly on the market.

Epic Games lost but Apple had pending app store changes. Both Epic Games and Apple are attractive. Epic Games has filed a similar case against Google, which is set to go to trial in 2023. App stores set rules around privacy, security, and even the types of apps that can be created.

Third party stores can set different rules which may be more relaxed and allow developers to keep more money from the apps they sell.

You have been Sherlock

Independent developers say they are sometimes “Sherlocked” by Google and Apple. They develop an app, and soon after the platforms embed the app’s features into the operating system itself, killing the developer’s product.

Making money developing a mobile app is not as easy as you might imagine.
stock struggle

FlickType was developed as a third-party keyboard for the iPhone and Apple Watch in 2019. Shortly after that, Apple apparently told the developer that the keyboards for the Apple Watch were Not allowedThey announced the feature themselves.

Developing a single app can take three to nine months and can cost between $40,000 and $300,000 to create a minimum viable product. Some applications take much longer to develop.

In 2021, a group of UK-based developers filed a £1.5 billion class action lawsuit against Apple over store fees. The case will be heard in the UK.

The European Commission told Apple that it abused its position and distorted competition in the music streaming industry and that its restrictions on app developers prevent them from telling users about cheaper alternative apps.

For example, when Apple creates a music app, competitors like Spotify argue that this is unfair. They have to pay 15% or 30% of their revenue to Apple, their competitor, which operates the store platform. Until recently, Apple prevented Spotify from telling users about cheaper options (such as signing up via the service’s website).

A report by the UK Competition and Markets Authority has highlighted concerns that tech giants are creating barriers to innovation and competition. Their full market report is due in June 2022. The UK government has pledged to introduce new laws “when Parliamentary time permits”.

Alternative App Stores

The European Union’s Digital Markets Act could come into force by the spring of 2023. The legislation is designed to open up mobile platforms by allowing users to install apps from alternative stores, and ensuring that app store providers do not favor their own products or services over third-party offerings. developers.

In February 2022, a US Senate committee approved a bill aimed at reining in app stores.

It is possible to install apps from other specialized stores on Android devices – such as the F-Droid open source app store. But the Play Store is available on almost every Android phone by default, which means that the apps available on it can reach a much larger number of users.

Both Apple and Google’s app review processes (which look at developer apps before they are made available) have been heavily criticized for their lack of transparency, consistency, and general inequality. Independent developers have no real leverage against the billion-dollar international companies.

Google has been criticized for failing to provide meaningful explanation when removing apps from its Store.

Users privacy

Apple has expressed security and privacy concerns about allowing apps from other stores on its devices.

App Store reviews can attempt to ensure that apps follow their own privacy policies. However, most users don’t read these, and apps can actually access and share much more data than users realize.

It is likely that third party app stores create a trade-off between user freedom and user safety. Some users may prefer Apple and Google’s approach to privacy. Others may prefer a more open experience, where they can install apps from smaller independent developers, who can develop their own apps without having to jump through the loops of large app stores.

The truth is, it’s possible to give users that choice – evidence from the lawsuits shows that Apple originally planned to support running apps outside of its App Store. The law on digital markets may force Apple to reconsider.

DMA will not provide results to users and developers unless it is properly implemented. The European Commission itself appears to be on the cusp of becoming a dedicated regulator for the first time. This will take some time, and the committee will need to put together a large enough team to provide meaningful oversight and enforcement.