The evil of "monopoly" in app distribution stores

Photo: Visual China

Source: 21tech

Author: Poplar

Editor: Zhang Weixian

At the CCTV 315 gala, an industry chaos belonging to the PC Internet era was exposed.

According to CCTV Financial Report, on many software download websites, users will be induced to download a downloader in the name of "high-speed download", and when users download software on the downloader, they will often be bundled to download other software.

In this process, "high-speed download" is actually not high-speed, its download speed is no different from ordinary download, just a way of commercial labeling, but it is the difference of this labeling that captures the psychology of users seeking speed.

Once the user chooses the downloader to download the software, the hidden prompts and repeated pop-up windows in the process will often make the user's computer desktop have some other software.

In the end, software products have achieved user downloads, and software websites and downloader operating companies have also achieved the purpose of making money, but these are based on infringing on consumer rights and interests.

After this industry chaos was exposed, a senior Internet industry insider said that the software download chaos is a stubborn disease, not only on the PC side, but also in the mobile Internet era.

Especially after more than ten years of development, the mobile application distribution market has basically taken shape from the initial hundred flowers to the final mobile phone manufacturers singing the protagonist. Now, in addition to the problem of inducing users to download applications, the game between applications and channels and the competition between channels are also the focus of attention in the current application distribution market.

Changes in app distribution channels

According to the 49th Statistical Report on the Development of China's Internet Network released by CNNIC, as of December 2021, the number of mainland Internet users reached 1.032 billion, of which 99.7% of netizens used mobile phones to access the Internet.

In fact, at present, the vast majority of netizens' online behavior is achieved through mobile terminals. With the migration of netizens from the PC Internet to the mobile Internet, the application distribution market has also experienced a long period of adjustment.

Around 2011, in the early stage of the development of the mobile Internet, according to the logic of the PC Internet era, software websites are the main channels for software distribution, and mobile application stores will also become the traffic entrance in the mobile Internet era.

So at that time, all kinds of app stores sprang up. By 2013, Baidu had acquired 91 Wireless for $1.9 billion, pushing the competition for an application distribution platform to a climax.

However, with the rise of domestic mobile phone manufacturers, the application stores brought by mobile phone manufacturers have gradually begun to control application distribution channels by virtue of the innate advantages of terminals.

For example, at present, several mobile phone manufacturers with top sales ranks, such as Huawei, Xiaomi, OPPO, vivo, etc., have their own app stores. Therefore, in the mobile application distribution market, mobile phone manufacturers and third-party application distribution platforms have also formed a direct competitive relationship, and in this process, there have also been some suspected unfair competition.

During the 315 period this year, some media exposed the phenomenon that mobile phone manufacturers have their own app stores to block third-party application distribution platforms. According to the media test, in the self-contained application stores of Huawei, Xiaomi, OPPO, vivo, Meizu, Meitu, realme and other brand mobile phones, third-party application distribution platforms such as AppBao, Pea Pod and TapTap cannot be searched.

Not only that, in addition to blocking third-party application distribution platforms in their own app stores, if users want to download these platforms through other channels, mobile phone manufacturers will also carry out risk warnings and other interception behaviors on the grounds of "security risks".

In this regard, some legal sources pointed out that these interceptions are suspected of violating the Anti-Unfair Competition Law. According to Article 12 of the Anti-Unfair Competition Law, business operators must not use technical means to obstruct or disrupt the normal operation of network products or services lawfully provided by other business operators by influencing user choices or other means.

The battle between apps and channels

On February 17, 2020, Baidu announced the offline 91 and Android markets, which also means that Baidu has officially withdrawn from the competition in the app distribution market. In fact, in front of the mobile phone manufacturer's own application store, the living space of the third-party application platform has been left, and the existing old platforms on the market are left with application treasures, pea pods and so on.

However, the newly emerging TapTap in the past two years is becoming a new variable in the application distribution market. Behind its rise, it also reflects the confrontation between current product applications and channels.

In September 2020, Mihayou's "Original God" and Lilith's "Awakening of All Nations" announced that they would not be available for download in Android app stores such as Xiaomi and Huawei. What led to this scene was the high cost of domestic Android channels.

In February 2021, NetEase CEO Ding Lei bluntly said at the earnings conference that China's Android channel share is the most expensive in the world, up to 50%, and the ecology of this share is unhealthy, because it is about 20% more expensive than Apple.

In fact, "Original God", which was not launched on the Android App Store, was also a great success in the end, which proved that it is not impossible to bypass the Android channel if the product is good enough. TapTap relies on a business model that does not take a share, but makes a profit through advertising, which also makes it favored by game manufacturers.

Overseas, Google Play and AppStore stores have also basically monopolized the application download market by virtue of the status of Android and iOS ecology in mobile terminals, so "Apple tax" and "Google tax" have also become two mountains that developers cannot avoid.

"Apple tax" refers to Apple's regulation that for apps launched on the AppStore Store, in-app purchases must go through Apple's payment channels, and Apple will take a 30% commission from it. Google also announced in 2020 that it will charge a 30% commission on all apps on the Google Play Store starting in October 2021, after the regulation was mainly aimed at the game industry.

But as the antitrust wave sweeps the world, the monopoly positions of Google and Apple in the app distribution market are also gradually being broken. In August 2021, South Korea's parliament voted to pass the Electronic Communications Business Act, which stipulates that neither Google's Google Play Store nor Apple's AppStore store can force developers to use the platform's unique payment system.

The Open App Market Act, passed by the U.S. Senate Judiciary Committee in February, also requires Apple and Google to allow app developers to use other payment systems on iOS and Android, and to allow consumers to install third-party app stores.

If developers can bypass Google or Apple App Store payment systems and adopt third-party payment platforms, it also means that developers will no longer have to pay "Google taxes" or "Apple taxes."

Some industry analysts have said that the existence of "Google tax" and "Apple tax" reflects the monopoly position of Google and Apple in the app store field, and for app developers, they do not have the ability to bargain on the proportion of shares.

In China, whether it is blocking other app stores or setting up to 50% of the share ratio, it is also because the existing app stores have enough voice. Therefore, whether this status quo can be broken will also determine whether China's application distribution market can enter a new development journey.

Editor: Lu Taoran