Working paper

Entry and competition in mobile app stores

The DMA raises tantalising opportunities for app stores innovation, making it the most exciting area of digital regulation.

Publishing date
26 January 2024
A person using a smartphone

Entry by rival app stores on the two currently available mobile operating systems is an exciting potential benefit of the European Union’s Digital Markets Act (DMA). Apple and Google will need to share the technical specifications of their interfaces with developers and offer them the same functionalities they give to their own stores. The DMA also allows developers to disintermediate the legacy stores entirely by mandating downloads from the web to handsets. These changes should stimulate price competition – resulting in fees falling from the current 30 percent – and competition in variety and features.

Privacy and security will be important issues, with the question of who is permitted to offer rival stores being critical. Good enforcement by the European Commission will be necessary to balance gatekeeper rules restricting dangerous services with the need for contestability.

The paper concludes with examples of rival app stores that can be expected to enter. Stores will differentiate through curation, such as stores for children, for those trying to reduce their carbon footprints or for those seeking to use public services in a particular country. Some stores will innovate through alternative payment schemes – for example, a newspaper store that enables per-article pricing and pioneers innovative data-sharing policies. Lastly, developers such as Epic have long stated their desire to offer stores with innovative technology.

About the authors

  • Fiona M. Scott Morton

    Fiona M. Scott Morton is the Theodore Nierenberg Professor of Economics at the Yale University School of Management.  Her field of economics is industrial organization and within this field she focuses on empirical studies of competition. The topics of her current research are the economics of competition enforcement and competition in healthcare markets. From 2011-12 Professor Scott Morton served as the Deputy Assistant Attorney General for Economic Analysis (Chief Economist) at the Antitrust Division of the U.S. Department of Justice, where she helped enforce the nation’s antitrust laws. She frequently presents to, and advises, government agencies tasked with enforcing competition law. At Yale SOM she teaches courses in the area of competitive strategy and competition economics. She served as Associate Dean from 2007-10 and has won the School’s teaching award three times. She founded and directs the Thurman Arnold Project at Yale, a vehicle to provide more competition policy programming to Yale students and the wider competition community. Professor Scott Morton holds a BA from Yale and a PhD from MIT, both in Economics.

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