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All Things D: For several months, Google has been secretly using a technology called "Bouncer" to scan Android apps for malware and block them from the Android Market. Bouncer searches app code for known malware and spyware, as well as simulating the behavior of apps on Android devices to search for anything malicious. When Bouncer finds a new type of exploit, Google re-scans all existing apps to see if any of them contain similar malware.
According to the company, Bouncer has reduced the number of malicious programs in the Android Market by 40 percent.