The Spillover Effects of Copycat Apps and App Platform Governance

Abstract

From taking inspiration to outright copying, new apps are frequently developed using the ideas of successful incumbents. Mobile app platforms, such as the Apple App Store and Google Play Store, have policies intended to screen these "copycat" apps.

We study the effect these "copycat" apps have on the demand and behavior of incumbents by leveraging data from multiple Android app markets in China. We first identify which apps copied others using a supervised machine learning approach. Our identification strategy leverages the fact that we observe the same app competing against different competitors on different platforms.

Our findings show that copycats tend to be more prevalent in smaller app markets and non-gaming categories. On average, copycats significantly reduce the demand for incumbent apps. This effect is most prominent in larger, highly rated apps. Furthermore, we find that the entry of copycats affects the innovation of incumbents. Incumbents who are exposed to copycats make larger changes to their descriptions and file size, while simultaneously seeing a reduction in their user ratings, and become less likely to use the platforms for subsequent releases. Our results suggest that the filtering of copycat apps confers significant benefits to incumbent app developers but reduces overall downloads of the app platform. This finding may inform recent discussions on the value that app platforms provide to developers.

Keywords: mobile apps; copycat apps; app platforms; spillover effects; platform governance