Gatekeepers of Innovation: Antitrust Challenges in the Digital Marketplace

In April 2013, AppGratis—a popular app-discovery platform with over 12 million iOS users—was abruptly removed from Apple’s App Store. [1] Apple cited violations of App Store guidelines, specifically in regards to restrictions against apps promoting or marketing other apps in a manner similar to the App Store itself. [2] This sudden removal left AppGratis unable to reach its target user base, underscoring broader concerns about Apple’s gatekeeping role in the digital marketplace. 

While Apple maintains that its stringent App Store policies are designed to ensure security, quality, and a consistent user experience, critics argue that these practices can stifle innovation and limit consumer choice. By controlling which apps are allowed on its platform and enforcing strict guidelines, Apple holds substantial power over developers’ access to the market, raising questions about fair competition and the need for regulatory oversight.

I. Defining Platform Owners and Their Market Power

To understand the broader antitrust implications, it is essential first to clarify who “platform owners” are and how they wield their considerable market power. Companies such as Apple, Google, and Amazon are not mere service providers; they are gatekeepers who dictate the terms under which developers and businesses access consumer markets.

Apple, specifically, requires that all digital transactions on its App Store be processed exclusively through its in‑app purchase system as opposed to any external purchasing systems managed by the application itself. Typically, this means that Apple takes a 30% commission fee on each sale. [3] This commission model not only ensures a steady revenue stream for Apple but also acts as a financial barrier, limiting developers’ ability to explore alternative or potentially lower-cost payment solutions. Such rigid structures squeeze profit margins and can deter smaller developers from entering the market.

Furthermore, every app submitted to the App Store must undergo an extensive review process designed to enforce strict guidelines regarding security, content, and functionality by blending automated checks with human evaluation. [4] While these guidelines were designed to enforce strict rules regarding security, content, and functionality and aim to maintain high standards and safeguard users, they also provide Apple with broad discretion. [5] The review process entails reviewers claiming a batch of apps through a dedicated web portal and then assessing them using an iPad—or an Apple Watch or Apple TV for relevant apps—and comparing each submission against Apple’s App Store Guidelines. [6] Reviewers are expected to process between 50 to 100 apps per day, with their throughput and the subsequent overturning of decisions carefully monitored by Apple. [7]

Despite these strict guidelines, critics argue that the process remains highly subjective and often follows arbitrary guidelines. A 2015 Medium article details how the review process can extend beyond seven days—or even stretch into weeks—especially when reexaminations and back-and-forth clarifications over ambiguous rules are required. [8] Given that reviewers are tasked with processing between 50 to 100 apps per day, including revisiting earlier decisions when discrepancies arise, the lag between the initial review and the final decision can be considerable.

Apple’s policies also require that iOS apps be exclusively distributed through its App Store. [9] By prohibiting alternative channels, Apple consolidates its control over the marketplace and restricts developers from seeking broader distribution options. In contrast, other smartphone platforms—especially those running Android—support third-party app stores and alternative distribution methods. For instance, the Amazon Appstore offers developers another venue with potentially lower fees and different revenue models. [10] Similarly, Aptoide provides a decentralized app distribution model, and open-source alternatives like F-Droid allow for app distribution free from restrictive fees and guidelines. [11] These platforms not only increase developers’ flexibility but also foster a more competitive ecosystem by lowering barriers to entry and encouraging innovation. In comparison, Apple’s closed ecosystem reinforces its market dominance by preventing the emergence of such competitive alternatives.

While the United States has traditionally relied on reactive antitrust litigation to address monopolistic practices, the European Union has embraced a more proactive approach. The Digital Markets Act (DMA) is designed to preemptively regulate digital gatekeepers and curb practices that could harm competition. [12] For instance, such proactive measures might have been effective in curbing anti-competitive integration strategies—like those seen in U.S. v. Microsoft, where bundling was used to lock out rivals—by intervening before dominant firms could utilize their market positions. This difference between the US and EU underscores the broader need for forward-looking regulatory frameworks capable of addressing emerging integration strategies and other forms of market dominance.

II. Lessons from U.S. v. Microsoft (2001)

The landmark U.S. v. Microsoft (2001) case provides a crucial historical precedent for understanding how integration strategies can be used to reinforce market dominance and stifle competition.

At the center of this case was the decision to bundle Internet Explorer with Windows. The government contended that this integration was not a benign business strategy but a deliberate tactic to lock out competitors, a strategy ultimately ruled to be an abuse of monopoly power. [13] This decision set a critical precedent: integration strategies that leverage market dominance to stifle competition violate antitrust principles. Microsoft’s bundling not only made it significantly more challenging for alternative browsers to gain traction—pushing Internet Explorer’s market share above 75%—but also diminished the incentive for rivals to innovate. [14] This ruling has long-standing implications, as it underscores that when a dominant firm uses its gatekeeping power to integrate products in a way that marginalizes competitors, consumer choice and market innovation suffer. 

While the Microsoft integration case involves browsers rather than apps, the underlying strategy is remarkably similar. Both scenarios involve the dominant platform owner setting default options that disadvantage competitors. In the case of app stores, a platform owner like Apple can use its gatekeeping power to favor its own offerings or those of selected partners, thereby establishing a self-reinforcing cycle of market control, much like Microsoft’s bundling of Internet Explorer with Windows effectively confined users to a single browser choice. This cycle reinforces the market position of the dominant player, making it increasingly difficult for new, smaller competitors to break through. While the Microsoft case set a foundational precedent for scrutinizing integration strategies, similar concerns persist today. This is illustrated by the modern dispute between Epic Games and Apple—a case that offers a contemporary lens on how dominant platforms leverage gatekeeping power to maintain market control.

III. The Epic Games, Inc. v. Apple Inc. Case: A Modern Lens on Digital Gatekeeping

At the core of the 2013 Epic Games, Inc. v. Apple Inc. dispute is Apple’s requirement that all in-app transactions occur through its proprietary system. [15] This commission fee structure imposes a dual burden: it increases costs for developers and leaves them with little room to negotiate or seek alternative payment arrangements. Moreover, Apple’s policies actively restrict developers from informing users about alternative purchasing methods, effectively locking both parties into a closed ecosystem that bolsters Apple’s market dominance. 

The Epic Games case originated when Epic bypassed Apple’s in‑app purchase system by implementing a direct payment method within Fortnite, allowing users to purchase V‑Bucks directly from Epic—thereby challenging Apple’s 30% commission fee and its restriction on directing users to alternative payment methods. [16] This legal battle urges us to reexamine the balance between a platform owner’s right to secure its ecosystem and the imperative of fostering a competitive marketplace. This case questions whether these justifications adequately compensate for the anti-competitive effects that arise from such closed practices. [17] Notably, the ruling set an important precedent by acknowledging that even well-intentioned measures can stifle competition if they curtail developers’ ability to innovate or offer alternative transaction options. This context deepens the discussion on digital market regulation, highlighting critical questions: Where should regulators draw the line between legitimate ecosystem management and practices that limit consumer choice and innovation? Ultimately, it underscores the urgent need for a modern regulatory framework—one that protects competition and innovation while recognizing the rights of platform owners. In the following section, we explore specific regulatory measures that aim to strike this delicate balance, paving the way for a more equitable digital marketplace.

IV. Balancing Ecosystem Management and Market Fairness

By controlling which apps are approved for its App Store, Apple effectively “filters” the market, favoring its own services or those that align with its strategic interests. Some developers have attempted to bypass these gatekeeping practices by exploring alternative revenue models, such as directing users to web-based transactions or partnering with third-party platforms. [18] However, these efforts are often met with swift contractual resistance—such as cease-and-desist orders, the removal of apps from the platform, and the suspension of developer accounts—which not only penalizes innovation but also reinforces the platform’s closed ecosystem. Potential reforms to this system include mandating transparency in app review processes—such as setting standardized timelines for decisions and appeals—along with enforcing fair, non-discriminatory fee structures for in‑app transactions. Additionally, requiring that platform owners allow alternative payment systems and third-party distribution channels could foster a more competitive ecosystem without undermining their right to manage security and quality. These measures collectively aim to mitigate anti-competitive practices while preserving innovation and consumer choice in the digital marketplace.

V. Conclusion

The experience of AppGratis serves as a poignant example of the challenges inherent in today’s digital economy. This incident underscores the significant antitrust concerns that arise when dominant platform owners, like Apple, exert extensive control over their digital ecosystems. Such control can suppress innovation and limit consumer choice, as developers may find their applications subject to sudden removal based on broad or inconsistently applied policies. Historic cases, such as U.S. v. Microsoft, have demonstrated how integration strategies can entrench market dominance, while modern disputes, like Epic Games, Inc. v. Apple Inc., reveal the persistence of these tactics in today’s digital landscape. These cases highlight the necessity of scrutinizing not only the legality of these practices but also their broader economic and social implications.

The entanglement between dominant digital platforms and everyday economic activity raises urgent concerns about the future of market competition and data privacy. If regulatory action fails to keep pace with digital innovation, we risk a landscape where a handful of companies dictate business practices, control the flow of information, and shape the fundamental structure of online interactions. Without a modernized approach to antitrust regulation, the next generation of entrepreneurs may find themselves locked out of critical markets before they even begin, while consumers are left with fewer choices and higher costs.

The case of AppGratis reminds us that the fight for a fair and open digital marketplace is far from over. The question is no longer just about whether Apple’s policies are fair—it is about whether we are prepared to shape the future of digital markets before they are irreversibly shaped for us.

Edited by Ashley Park

[1] AppGratis - Wikipedia. https://en.wikipedia.org/wiki/AppGratis?utm_source=chatgpt.com. Accessed 9 Mar. 2025.

[2] AppGratis - Wikipedia. https://en.wikipedia.org/wiki/AppGratis?utm_source=chatgpt.com. Accessed 9 Mar. 2025.

[3] “Apple App Store Commission Rates Global and EU 2024.” Statista, https://www.statista.com/statistics/1497695/revenue-split-apple-app-store-eu-global/. Accessed 2 Mar. 2025.

[4] Inc, Apple. “App Review Guidelines.” Apple Developer, https://developer.apple.com/app-store/review/guidelines/. Accessed 2 Mar. 2025.

[5] “Apple’s Difficult App Store Decisions Determined by Executive Review Board Run by Phil Schiller.” MacRumors, 21 June 2019, https://www.macrumors.com/2019/06/21/app-store-executive-review-board-phil-schiller/.

[6] Inc, Apple. “App Review Guidelines.” Apple Developer, https://developer.apple.com/app-store/review/guidelines/. Accessed 2 Mar. 2025.

[7] “Apple’s Difficult App Store Decisions Determined by Executive Review Board Run by Phil Schiller.” MacRumors, 21 June 2019, https://www.macrumors.com/2019/06/21/app-store-executive-review-board-phil-schiller/.

[8] Dave, Kushal. “Apple’s App Store Review Process Is Hurting Users, but We’re Not Allowed to Talk about It.” Medium, 13 Apr. 2015, https://medium.com/@krave/apple-s-app-store-review-process-is-hurting-users-but-we-re-not-allowed-to-talk-about-it-55d791451b.

[9] Inc, Apple. “App Review Guidelines.” Apple Developer, https://developer.apple.com/app-store/review/guidelines/. Accessed 2 Mar. 2025.

[10] App Store Fees: Are They Killing Innovation in Mobile? https://thisisglance.com/blog/app-store-fees-are-they-killing-innovation-in-mobile. Accessed 2 Mar. 2025.

[11] Explore Top 10+ Google Play Alternatives in 2025. 27 Feb. 2022, https://agiletech.vn/android-app-store-alternatives/.

[12] “Digital Markets Act.” European Commission - European Commission, https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3433. Accessed 2 Mar. 2025.

[13] United States v. Microsoft Corporation584 U.S. (2018) 

[14] “Apple’s Difficult App Store Decisions Determined by Executive Review Board Run by Phil Schiller.” MacRumors, 21 June 2019, https://www.macrumors.com/2019/06/21/app-store-executive-review-board-phil-schiller/.

[15] “Apple App Store Commission Rates Global and EU 2024.” Statista, https://www.statista.com/statistics/1497695/revenue-split-apple-app-store-eu-global/. Accessed 2 Mar. 2025.

[16] Epic Games’ Fortnite. “The Fortnite Mega Drop - Permanent Discounts Up to 20%.” Accessed April 2, 2025. https://www.fortnite.com/news/the-fortnite-mega-drop-permanent-discounts-up-to-20-percent.

[17] Epic Games Inc, v. Apple, Inc. 67 F.4th 946 (2023) https://law.justia.com/cases/federal/appellate-courts/ca9/21-16506/21-16506-2023-04-24.html.

[18] “Developers Say Apple and Google Are Running App Store Monopolies | Computer Weekly.” ComputerWeekly.Com,https://www.computerweekly.com/news/365534673/Developers-say-Apple-and-Google-are-running-app-store-monopolies. Accessed 2 Mar. 2025.