Regulating the Mobile App Market

This article originally appeared in Regulation. Click here to read the rest of the article.

By Logan Albright

The market for mobile apps on smartphones and other mobile devices has grown tremendously over the last few years. Indeed, it would be hard to find another sector that enjoys a similar level of creativity and innovation. Much of this vibrancy is driven by low barriers to entry and the fact that practically anyone with any level of programming savvy can try his or her hand at developing the next Angry Birds, with the hope of making millions.

Because of the highly decentralized and heterodox nature of this market, it is difficult to estimate its size. Various analyses have put it somewhere between $20.4 billion and $53 billion a year, with expectations that it will grow to between $63.5 billion and $143 billion by 2017.

That vibrancy has put apps under the scrutiny of state and federal regulators who worry about the effects of new technologies on the broader market. In many cases, the apps serve as a way of connecting users with services that have been around for a
long time, but circumvent existing regulation of those services. Government agencies often see the apps as opening regulatory loopholes, and the agencies—often at the behest of incumbent firms that have long been bound by those regimes—are increasingly interested in finding ways to close them.