Friday, May 12, 2023

More App Store Studies

Juli Clover:

Apple’s App Store policies may be violating Japanese antitrust law, according to a new report from the Japan Fair Trade Commission (FTC) that was shared by Nikkei. Japanese regulators do not believe there is enough “competitive pressure” on Apple and Google as the two companies have a duopoly in mobile operating systems and dominate the app market.


Japanese regulators want Apple and Google to allow users to choose third-party payment methods for apps and services, rather than forcing them to use the built-in purchase options in the App Store and Play Store.


The FTC suggested that app store commission rates between 15 and 30 percent could be an abuse of a dominant bargaining position.

Florian Mueller:

The JFTC makes a clear distinction between conduct that raises concerns under Japan’s Antimonopoly Act (AMA) and further observations and recommendations that may require new legislation in order to restore competition.

Potential violations of the AMA relate to “exclusion of competition through self-preferencing”, the unilateral imposition of “high commission rates” (app tax), and a concept that is increasingly relevant in Japan as well as South Korea, and possibly also in other East Asian jurisdictions: “abuse of a superior bargaining position”.


In its market study, the regulator correctly identified the problem that switching rates between mobile operating systems are low, and that Android apps don’t compete with iOS apps (and vice versa). Also, 97.4% of all Android app downloads in Japan are made from the Google Play Store, which shows that Google faces “[l]imited competitive pressure from other app stores.” Sideloading on iOS (which again is entirely impossible on iOS) also exerts “[l]imited competitive pressure” because users commonly download apps from app stores. Web apps are also dismissed as a competitive force as they just can’t compete with native apps[…]

Apple (MacRumors):

An independent study conducted by economists at Analysis Group found that small developers on the App Store grew their businesses and reached more customers around the world, even outpacing larger developers. With the support of a wide range of App Store tools and initiatives, small developers globally — defined as those earning up to $1 million a year and with fewer than 1 million annual downloads — grew revenue 71 percent between 2020 and 2022. In the U.S., those developers saw an above-average increase of 83 percent in earnings during the same period.

This is the same group that did the study last year, and again it’s “independent” but funded by Apple. The PDF is very short, only including summary statistics.

It sounds like they are saying that small developers in the US have increased their sales 83% in just two years, which is incredible but does not match what I am personally seeing or the general sentiment that I hear from other developers. So I tried to figure out what exactly the study is saying and what it really means:

I also thought this part was interesting:

In addition, while over half of all developers’ earnings in 2022 originated from games, small developers’ earnings came from apps across more diverse categories, such as entertainment, social networks and health and fitness apps, with games accounting only for about a quarter of small developers’ earnings.

Note that they switched to talking about developers who were small in 2022. It sounds like they’re trying to spin a success for small developers—look how many different ways there are for you to succeed. But this is exactly what you would expect to see given that there is a high level of inequality and that most revenue comes from games. You could also look at this as saying that it’s harder for small developers to be successful with games or that it’s hard to have a big hit that’s not a game.


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