Could the App Store and Google Play be violating competition law?

1. Entrance

Mobile app marketplaces have become one of the most strategic areas of the digital economy with the proliferation of smart devices. Apple's App Store and Google's Play Store are the two dominant players in this market. These platforms have complete control over the distribution, marketing, and pricing of applications. However, this control has also led to practices that conflict with fundamental principles of competition law,.

This article will evaluate issues such as the structure of the mobile application ecosystem, market definition, abuse of dominant position, and mandatory in-app purchases in light of both Turkish Competition Law and EU/US practices .

2. Mobile Application Ecosystem and Market Definition

A mobile application ecosystem refers to a multifaceted market structure involving operating systems (iOS, Android), app stores, developers, and end-users. The "platform effect" is dominant in these markets; that is, the more developers the store attracts, the more users it attracts, and the more users it attracts, the more developers it attracts. This leads to the App Store and Google Play exhibiting inherent monopolistic characteristics

The Turkish Competition Authority also evaluated this structure and defined the "mobile application distribution services market" as the relevant market in its preliminary investigation report numbered 2022/07-31

3. Dominant Position and Abuse of Competition

According to Article 6 of the Law No. 4054 on the Protection of Competition, abuse of dominant position is prohibited. Since the App Store and Google Play essential facilities , the rules applied to developers on these platforms carry a serious risk of competition violations.

3.1. In-App Purchase (IAP) Requirement

Apple only allows the use of its own payment infrastructure for in-app purchases. In this case;

• Developers have to pay Apple a 15-30% commission
• Prices rise, and the end user suffers
• Excluding alternative payment systems creates a barrier to entry

The Epic Games v. Apple case in the US serves as an example of this. Epic Games was removed from the App Store after updating its app to bypass the IAP (In-App Navigation) system, and Apple's action was taken to court as "anti-competitive practices." The California District Court did not consider Apple's IAP system to be "monopoly without consumer harm," but it did acknowledge that blocking in-app navigation constituted a violation of competition rules

3.2. Self-Preferencing

Google Play and the App Store prioritize their own apps in store search results, putting third-party apps at a disadvantage. This behavior the EU Commission's 2018 Android decision, resulting in a €4.34 billion fine for Google.

4. Commission Rates and Price Squeeze

Apple and Google take a commission of 15% to 30% from app developers on digital product sales. These rates are:

• Creating a barrier to entry for new developers
• It has a limiting effect on pricing
• It reduces consumer welfare

Subscription services, particularly Spotify and Netflix, have restricted their services due to high commission rates, driving consumers to subscribe via the web. This negatively impacts user experience and undermines fair competition.

5. Turkish Competition Authority Practices

The Turkish Competition Authority has conducted both preliminary investigations and full-fledged investigations into the App Store and Google Play to date.

5.1. Google Decisions

• In 2021, Google was fined 296 million TL for prioritizing its own services in search results .
• In decision number 2022/07-31, Google's practice of offering its Android operating system and app store as a "package" was criticized and found to be "restrictive to independent action.".

5.2. Apple Review

The Turkish Competition Authority launched a preliminary investigation into Apple in 2021 and stated that the IAP (Information Technology Adoption) requirement could restrict competition in Turkey as well. The process is still being monitored.

6. The European Union and New Regulations

The EU has enacted a new regulation called the Digital Markets Act (DMA) to limit the market power of digital platforms . This regulation aims to:

• Dominant digital platforms (Apple, Google, etc.) have been given "gatekeeper" status
• Allowing different payment systems has been made mandatory
• Self-preferencing is prohibited

The EU Commission requested defenses from Apple and Google in 2024 under the DMA (Directional Amendment Act), and new sanctions against companies that fail to implement their compliance obligations are on the agenda.

7. Judicial Processes in the United States

In the US, major players like Epic Games, Match Group (Tinder), and Spotify have filed antitrust lawsuits against Apple and Google . The main allegations in these lawsuits are:

• Making their own infrastructure mandatory
• Blocking alternative app stores
• Containing contractual clauses that exclude competition

These cases are still ongoing, and the U.S. Federal Trade Commission (FTC) is expected to become involved.

8. Proposed Solutions and Alternatives

The most frequently suggested solutions for developers and users today are as follows:

• Allowing the use of alternative app stores (sideloading)
• Bringing commission rates down to a reasonable level
• Giving app developers the freedom to set prices
• The right to provide in-app links should not be blocked
• Publication of transparent reports accessible to consumers

Regulations similar to the DMA could be encouraged in Turkey through secondary legislation or decisions of the Competition Board .

9. Conclusion and Evaluation

While mobile app stores have become the main artery of the digital economy, the unilateral impositions of platforms operating in this field severely restrict. The "gateway-keeping" position of actors like Apple and Google has created new problems that challenge classical competition theories.

While the steps taken by the Turkish Competition Authority in this area are promising, a new digital platforms law, open API regulations, and structural measures to ensure payment infrastructure diversity have become essential.

The current system, dominated by the App Store and Google Play, high costs, limited options, and a lack of transparency . Making these markets more competitive is now a necessity to protect competition, foster digital innovation, and improve user well-being.