Project description
Public-policy interventions for fair competition in app markets
App markets such as Apple’s App Store or Google Play have attracted scrutiny from regulators for promoting their own apps over third-party apps, which can distort competition and harm innovation. However, there is uncertainty about how to optimally intervene against such self-preferencing. The ERC-funded APPMARKETS project aims to assess the effectiveness of public-policy interventions against self-preferencing. The project will evaluate the effects and mechanisms of several interventions implemented around the globe and compare them to validate existing theories. The findings will help stakeholders and government agencies to develop appropriate strategies. The project will conduct four in-depth quasi-experimental studies using product-level data from mobile app markets and integrate the findings into a holistic understanding using measurement and analysis protocols.
Objective
App markets—such as Apple’s App Store or Google Play—have significant economic importance and drive digital innovation. In 2021, the App Store alone facilitated transactions worth over EUR 511 Bn, which equals the GDP of Sweden.
However, app market operators have also attracted severe scrutiny from regulators due to their integrated gatekeeper structure: they operate a marketplace while also competing within them with their own apps. This gives app market operators an incentive for self-preferencing: they promote their own apps over third-party apps, consequently distorting competition and harming app innovation.
Uncertainty remains regarding how self-preferencing can effectively be counteracted with public policy interventions. Although legislators have advanced bills to restrict self-preferencing, including the Digital Markets Act, existing theoretical models are scant, make mixed predictions, and lack empirical validation. This uncertainty is problematic because app markets represent a complex node of the digital economy where regulatory interference—if not done “right”—can likewise harm innovation.
This project will empirically evaluate which public-policy interventions against self-preferencing are effective in restoring app developers’ innovation incentives. It will (i) explain the effects, conditions, and mechanisms through which the interventions function and compare, (ii) permit a validation of existing theory, and (iii) aid stakeholders and government agencies in developing appropriate strategies.
To achieve this objective, this project will (i) conduct four in-depth quasi-experimental studies, (ii) which exploit plausibly exogenous policy-changes against self-preferencing, (iii) leverage unique time-series product-level data from mobile app markets, and (iv) integrate the findings into a holistic understanding using measurement and analyses protocols. An extensive communication plan ensures the transfer of scientific expertise into public knowledge.
Fields of science
Programme(s)
- HORIZON.1.1 - European Research Council (ERC) Main Programme
Topic(s)
Funding Scheme
HORIZON-ERC - HORIZON ERC GrantsHost institution
80333 Muenchen
Germany