Isn't it kinda obvious
that what you do is this
virus software maker detects a software which uploads GPS data to third party, the app is put through a vetting process to see if it actually does so maliciously, whilst this is done, the app market's key is revoked, putting the app off the market whilst it's investigated.
the developer can continue to contact google to plead it actually does have a good purpose, google will then respond to activate the key or reject the app permenantly, marking the developers name with a black mark, just in case they try it again.
I suppose this is why apples process of forcing people to pay money upfront kind of stops people from being naughty(although I'm sure it doesn't stop everyone), cause if you have to pay 100 dollars a year to have a developer key, then most russian virus writers aren't going to be bothered, to pay 100 dollars to get revoked every couple of months might be expensive, so even though the review process from apple is perhaps a bit over the top, the idea of forcing people to pay money upfront for a chance to get banned and blacklisted might be a good idea. even though I'm not happy with the idea of google deciding what you produce.
So perhaps, in order to get a developer key, you have to pay 100 dollars a year, then if your app is marked malicious, or companies like symantec mark your app as malicious through a "protector of the market affiliate program" then your app goes off the market and gets investigated, if you're clean, it's put back, if you're not, you get banned and have to open another account and pay another 100 dollars.
it might be a bit centralist, but at least people who believe their app will make MORE than 100 dollars, will still write apps, whereas anyone who seriously thinks it'll just make a couple of bucks will be deterred, hence cleaning up the market from the crap that people write at the same time. But if you write viruses, or malicious apps, you have a heavy price for getting found out.
so you can still have the free range market, it's just that if you're black marked, you might get revoked, perhaps that could work as a deterrant? or not, meh, I dunno, sounds viable at least.
although right now, I'm finding it hard to understand why the app is still on the market even though it's doing something a snake game shouldn't be doing. If the app was doing some kind of game matching with players on the train, I might think it's doing it's job, but a snake game with no multiplayer has no real purpose to use the GPS device, should get banned.