In many jurisdictions around the world, courts and policymakers see themselves as David-like underdogs against large platform Goliaths. But the reality is not so simple. When judicial power is used to reshape markets to limit one player’s dominance, there are unintended consequences for everyone in the ecosystem. In our recent amicus brief filed in the Android app market competition case Epic v. Google, we urged the 9th Circuit Court of Appeals to recognize that this case has significant implications for small businesses.
As often happens in cases between giants, smaller companies become collateral damage; in this case, Judge James Donato goes a step further and treats small businesses as pawns to be traded and shopped around. Under the district court’s injunction, every app must be available to be repackaged and listed by any third-party App Store, with no input. Developers would have no control over who sells their app and even how often they will get paid. This strips them of control over their app’s user experience, updates, and branding. Essentially, the injunction treats app developers as mere products on a shelf rather than independent businesses. Worse still, the mandated changes threaten to disrupt the Android app ecosystem, leaving developers to deal with the fallout on their own. For instance, if a third-party app store integrates poorly with the Play Store ecosystem, users might experience buggy downloads, mismatched app versions, or even malware issues. When these problems arise, the small developer—not the app store—will likely bear the blame, damaging their reputation and eroding user trust.
Unlike large corporations, small businesses can’t afford the cost of these sweeping changes. Adjustments of this magnitude require significant resources that only big companies can readily muster. Consider the introduction of the EU’s General Data Protection Regulation (GDPR): large corporations hired teams of lawyers and developers to ensure compliance, while small businesses had to shut down operations in the EU due to high compliance costs. The same dynamic is evident here. Notably, the only amicus brief in support of Epic came from Microsoft, a giant corporation with the means to handle the potential upheaval. And Microsoft’s position makes economic sense – for them. They are currently one of the richest companies in the world ($3 trillion +), employ hundreds of thousands, and can martial a literal army of lawyers and compliance professionals to manage any unexpected outcomes. Microsoft’s position highlights the discrepancy between what’s manageable for large corporations and what’s sustainable for smaller players. These resource challenges are compounded by the possibility that the Court of Appeals or the Supreme Court could eventually overturn or reinstate the injunction. Making sweeping changes to business plans is difficult and undoing or redoing them multiple times is much more so.
We’re urging the court to consider the unique challenges that small businesses face. Picture an indie game developer whose livelihood depends on consistent revenue from the Play Store. The injunction would open the door for any random company to distribute their game across multiple app stores, doubling their customer service workload and confusing users who encounter inconsistent updates or patches. Worse still, if that random company goes out of business without paying, the developer is now stuck with customers whose money was taken but never made it to the developer’s accounts. Without proper caution, this decision could make small businesses collateral damage, forcing them to navigate a radically altered landscape with insufficient resources. Instead of fostering competition, this scenario risks concentrating even more power in the hands of industry giants.
As we continue to advocate for the app economy’s small business community, we hope the courts will heed our call: when you reprogram the market, don’t make small businesses the beta testers.