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Policy Study Anticompetitive Practices of Online Platforms: Focusing on App Stores December 31, 2024

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Series No. 2024-12

Policy Study KOR Anticompetitive Practices of Online Platforms: Focusing on App Stores #Competition Policy
DOIhttps://doi.org/10.22740/kdi.ps.2024.12 P-ISBN979-11-5932-970-8 E-ISBN979-11-5932-995-1

December 31, 2024

  • 프로필
    Min Jung Kim
Summary
As economic and daily activities increasingly shift to mobile platforms, concerns are mounting over the excessive influence of platforms that play a central role in the mobile ecosystem. In particular, app stores, primary channels for distributing apps that enable online access via mobile devices, draw significant scrutiny from competition authorities, as platform dominance in the mobile operating systems (OS) market directly transfers to this market.

This study examines recent global regulatory trends concerning the app store market, identifying key anticompetitive practices by app store platforms: monopolization of app distribution, forcing proprietary payment systems, and self-preferencing. Among these, self-preferencing manifests in various forms and occurs when platforms enter adjacent markets they mediate, competing with business users. Thus, one of the critical issues in regulating the app store market is the entry of app store platforms into their own app stores and its implications.

Against this backdrop, the study focuses on analyzing issues related to platform entry into their own app stores. Theoretically, such an entry can have positive and negative impacts, necessitating empirical analysis. A comparative review of prior empirical studies on the app store platforms of Google and Apple reveals mixed effects on competing app developers’ innovation, varying by platform and app in question.

Given the challenge of defining an app market revealed by prior studies, this study conducts further empirical analysis using detailed app classification criteria from data.ai. This approach enables a more granular market definition and examination of multiple platform entry cases. Analysis of 16 Apple app launches, using data on apps available for download in the Korean App Store, finds the impact on competing developers’ innovation inconclusive. The effects likely vary by the platform app’s characteristics, the entered market’s competitive dynamics, and whether anticompetitive behaviors occur post-entry, yet further pathway analysis is needed.

While not providing direct policy implications, this study offers empirical evidence to inform app store market competition policies. Literature and this study’s findings suggest platform entry into app markets may yield positive effects, rendering blanket bans on platforms selling their own apps to prevent self-preferencing inadvisable. Recent competition authority actions targeting self-preferencing have spurred arguments against prohibiting proprietary app sales; however, such sales must be strictly distinguished from self-preferencing practices.
Contents
Abstract (ENG)
Preface
Summary (KOR)

Chapter 1. Introduction

Chapter 2. Review of Anticompetitive Practices by App Store Platforms
 Section 1. Overview of Global Regulatory Trends in the App Store Market
 Section 2. Japan’s Act on Promotion of Competition for Specified Smartphone Software
 Section 3. Concluding Remarks

Chapter 3. Prior Studies on App Store Platforms
 Section 1. Research on the Impact of Platform Entry into the App Market
 Section 2. Research on the Impact of Self-Preferencing by App Store Platforms

Chapter 4. Empirical Analysis of Platform Entry into the App Market
 Section 1. Data and Analytical Framework
 Section 2. Results of the Analysis on Platform App Entry
 Section 3. Robustness Checks and Discussion

Chapter 5. Conclusion

References
Appendix
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