For users, it’s easy to think of an app store as a big box retailer. You browse the shelves, find the app you want, and make your purchase. Unfortunately, policymakers are beginning to look at app stores this way too. This is a problem because developers know that apps aren’t just products on a shelf; they are businesses all their own.
Late last year, the U.S. District Court for the Northern District of California ruled against Google in Epic Games’ lawsuit, issuing a series of remedies ostensibly aimed at improving competition between the Google Play Store and third-party app stores on the Android platform. Instead, however, these remedies are likely to cause more harm than good for individual app developers. Of particular concern is that Google would be required to make the entire Play Store catalog available to any third-party app store that wants it.
In today’s ecosystem, app stores like the Google Play store are not big box retailers. They don’t buy products from suppliers to stock their shelves. Instead, the relationship between an app store and each individual app represents a contractual agreement between two businesses in an ongoing relationship. These relationships are symbiotic, with the app store providing useful services, such as data analytics, intellectual property protection, and a built-in audience of trusting customers, in exchange for the right to distribute each app.
The district court’s remedy misunderstands this relationship and threatens to create significant challenges for app developers. The requirement for Google to share the Play store’s entire app library with competing third-party app stores creates a presumption that those stores can sell and distribute developers’ products, services, and intellectual property unless a developer opts out on a case-by-case basis. Instead of recognizing that app developers choose to go into business with a store like Google Play in exchange for benefits, the district court assumed that apps can just be copy-pasted into infinite other stores. Of course, this requirement leaves a wide array of questions unanswered, some of which may have existential consequences for small and medium-sized app developers.
For example, if a third-party app store begins selling an app through its own payment system, how can the app’s developer collect their share of the payment? How will an app’s developer know whether each third-party store hosting their app is distributing software feature or security updates appropriately? What customer data do these stores collect, and what privacy policies do they have? How are they receiving and disposing of customer service inquiries? Do they have adequate redress procedures in place for dealing with copycat apps or other types of intellectual property theft? Are they hosted in countries that respect the rules of the digital economy?
To focus on one more question: do they have values that the app developer wants their product to be associated with? It is easy to imagine a third-party app store themed around political parties, or social movements, or adult content. If the district court’s order is not overturned by appeals courts, we may see many examples of app developers having their products featured in controversial third-party stores without their prior knowledge or consent.
The Epic v. Google case is not the only place to find government entities looking to force companies into business relationships they may not want. In the European Union, regulators recently used the Digital Markets Act (DMA) to require Apple to approve Hot Tub, an app that aggregates videos from a number of porn sites, for distribution on iOS through a third-party app store. While Apple complied with the order, the company stated that allowing such apps would undermine consumer trust in the iOS ecosystem and that third-party stores may not share their concerns for user safety.
If the district court order in the Epic v. Google case is upheld and the Google Play store catalog is shared widely, we may see outcomes like the DMA example on a mass scale. In a case like this, judges are policymakers too. They must understand that their decisions impact many thousands of small businesses, not just products on a shelf.