If you want to set up that Mom and Pop business using Target's (Apple's) resources (distribution, APIs, reviewers, et al.) then yes, you should have to get approval and Target (Apple) should have the right to say yay or nay and there are penalties when you abuse the privileges. That's how Amazon and Target marketplaces work. you agree to Target's TandC's to be able to use their platform to sell your stuff. If you violate them you're gone.
If I had the actual resources to build my own platform, manufacture the devices, create the software, along with the APIs that developers would use to create software and I charged them a nominal fee to be a developer, I would damn well reserve the right to kick them off of my platform for their bad behavior or shenanigans the went against the LEGAL agreement that they AGREED to. If they didn't want to be bound by the agreement then they wouldn't be able to create software for my devices. I certainly don't want some idiot politicians who are only guided by how much money they can get out of this with fines and consent agreements and such getting involved. But here we are, with EU meddling and the usual suspects around here thinking that it's going to suddenly make the iPhone platform some free love panacea.
Quick answer - it won't...this is all going to turn out very badly for consumers who will blame Apple for fraud, identity theft, viruses and whatever else ends up happening to which they should point people in the direction of their congress critters and the vocal supporters on this forum.