App Store Fees and App Business Models

Title: App Store Fees and App Business Models.

Speaker: José Ignacio Heresi (UAH).

Abstract: We study how an app store’s decision about its ad-valorem fee affects the business models chosen by app developers. We derive optimal choices for the app store and their effects on industry profits, consumers, and total welfare. Surprisingly, the platform’s optimal ad-valorem fee may be lower than the socially optimal one. Our findings provide insights into recent antitrust disputes and regulatory debates.