Information asymmetry in the mobile app space

Posted on February 14, 2013  /  0 Comments

Verizon has started to assess and issue “report cards” on mobile apps that its customers are likely to use, according to the NYT.

Sounds like a noble effort on Verizon’s part, but why is the carrier reviewing apps in the first place? After all, Verizon would benefit from apps using excess data, because that would result in higher cellphone bills for customers.

David Samberg, a Verizon spokesman, said that it behooved the company to inform customers on how apps affect their smartphones because an app that behaves badly can detract from the entire customer experience. And dissatisfied customers might complain to the carrier, not the app maker.

“If you have a problem and your data usage is through the roof, the app developer isn’t going to get that phone call,” he said. “Verizon is going to get that phone call.”

“We don’t want there to be any surprises,” he added. “We want people to be educated on what they’re downloading and how it’s going to affect their device.”

There is little doubt that customers are at an information disadvantage and may need a bit of help, especially at this stage as the market is occupied by lots of little players with little brand recognition. The question is whether Verizon, or the telco providing platform is the best to do it? Is it really a disinterested umpire?

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