App stores, particularly those on smartphones, have faced continuous scrutiny by policymakers and regulators. In a new insight, Technology and Innovation Policy Analyst Juan Londoño examines claims that mobile operating systems and app store markets lack competition and substitutability. Londoño contends that while policymakers and industry insiders have brought attention to the definition of these markets for developers, many of their claims are based on an inaccurate metric and ignore the alternative methods of monetization available.

Key points:

• App stores operate in a multisided market, which requires that antitrust analysis simultaneously consider app stores’ relationships with developers and end users; recent analyses have potentially mischaracterized both relationships.
• Some have alleged that the iOS and Android consumers are separate markets based on differences in average spending per user, but averages conceal the presence of high-spending consumers on each operating system.
• While developers have multiple alternatives to monetize and distribute their product, most arguments in favor of regulation focus on the sale of digital goods and services through app stores.

Read the analysis