Google Rules Could Squeeze Amazon Android App Store

Google’s (s goog) stance on prohibiting apps in Android Market from being mini-app stores led to the quick demise of Kongregate Arcade, a Flash (s adbe) game portal app that was pulled Wednessday less than a day after it launched. While Google’s quick action is forcing Kongregate to rethink its moves, it could also have an impact on Amazon’s plans for an Android app store.

Amazon (s amzn) recently began inviting developers to submit apps to its Amazon App Store for Android, offering them the promise of consumers being able to shop for apps from both their PCs and mobile devices. Users would be able to go online to, buy an app and have it pushed out to their phone. But as TechCrunch described after an interview with an Amazon officials, users will likely have to install their app purchase through an Amazon application. It sounds like users will also be able to buy an app directly from their phone with an Amazon App Store app as well.

But if Amazon relies on an app available through Android Market to be the distribution point for its Amazon App Store, it could end up getting pulled like the Kongregate Arcade app. Here are the Android Market’s terms of service: “You may not use the Market to distribute or make available any Product whose primary purpose is to facilitate the distribution of Products outside of the Market.” A “Product” is defined as “Software, content and digital materials created for Devices in accordance with the Android SDK and distributed via the Market.”

Amazon is reportedly talking to manufacturers about getting its app store pre-installed on phones. But it looks like those deals become essential if it wants to offer an Amazon app store app on Android devices. Or it will need to get users to side-load the Amazon App Store themselves, which could be tricky for many users. Amazon could still offer mobile users the chance to shop for apps though the mobile web version of, but an app would probably be more popular. Even if users don’t mind surfing from a mobile web site, if installation requires users to go through an Amazon app in Android Market, it could still run afoul of Google’s rules.

Amazon already pre-installs its MP3 store on many Android phones, so this may not be an issue if handset makers continue to work with Amazon. But as Google has shown with its alleged blocking of location provider Skyhook, it can act differently when it looks to push its own products. Google has been accused by Skyhook of pressuring Motorola (s mmi) and others to drop Skyhook’s positioning technology in favor of Google’s Wi-Fi technology. To be honest, I didn’t think Amazon’s app store would be much of an issue at all, but in light of Google’s stance on Kongregate, it’s not out-of-bounds to think Google won’t make it easy for Amazon to get its app store pre-installed.

Google doesn’t seem to have any problem with independent stores like GetJar. And it seems fine with partners such as Verizon (s vz) opening up its own V Cast Apps Store on Android devices. But how easy will it be for Amazon to get its own app store right on the phone next to Android Market? If it has no problem, it will show Android is still very open. But as the Kongregate and Skyhook situations show, Google still has an eye on the competition.

Related content from GigaOM Pro (sub. req.):