Apple’s Exclusionary App Store Scheme: An Existential Moment For The Digital Markets Act

By: Jacques Crémer, Paul Heidhues, Monika Schnitzer & Fiona Scott Morton (CEPR)

The Digital Markets Act (DMA) mandates that Apple provide its users with the option to utilize alternative app stores, highlighting the significance of such platforms in fostering quality and innovation. Despite the proliferation of diverse applications enhancing handset utility, there has been a decline in app installations. This trend may be attributed to the inefficiency of the discovery process and limited distribution innovation.

The current scenario is disadvantageous for both developers and consumers, necessitating innovation and store diversity. Competing app stores could enhance user experience through tailored curation and search functionalities, offering unique value propositions. These rival stores, whether operated by corporations like Disney, Pinterest, or American Express, or even by government entities, could introduce novel models such as subscription discounts or specialized content for specific user needs.

Users could opt for a preferred default store while exploring others, or even exclusively utilize a rival store, bypassing the cluttered legacy store. For instance, parents might prefer a child-centered store for their children’s easy access.

These initiatives epitomize innovation, a central objective of the DMA, aiming to counteract concerns raised by the European Parliament regarding incumbent gatekeepers stifling innovation. Facilitating access to third-party stores is geared towards fostering platform competition, leading to enhancements in pricing, quality, and innovation for the benefit of end users…

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