ERC Starting Grant

App markets—such as Apple’s App Store or Google Play—have significant economic importance and drive digital innovation. In 2021, for example, 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 inter-ventions. 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 assess how several public-policy interventions against Apple's and Google's self-preferencing impacted app innovation in their app stores.