Google slapped with antitrust lawsuit over app store management
An assembly of attorneys general representing 36 states and the District of Columbia filed an antitrust lawsuit against Google on Wednesday, claiming the company's handling of the Play Store violates U.S. law.
Filed in California federal court, the suit is led by Utah, North Carolina, Tennessee, New York, Arizona, Colorado, Iowa and Nebraska, reports Politico. It is the latest in a string of antitrust challenges against the search giant, which saw three similar actions in 2020.
In October, the U.S. Department of Justice filed a suit targeting Google's outsized power in mobile search. December saw 15 states and territories file suit against Google's advertising business, while a second action backed by 38 states and territories again took issue with the firm's search engine.
Today's antitrust suit deals with Google's Play Store fee sharing structure, which currently demands developers pay a 30% commission on sales of digital goods and services. The company recently adopted a fee schedule that drops the rate down to 15% for the first $1 million app makers earn in a year.
Google's reduced commissions came after the company said it will more strictly enforce a policy that requires developers to use its billing system for purchases made through the Play Store. The announcement sparked intense pushback from the likes of Netflix, Spotify and Match Group, which have avoided Google's commissions. That change is set to go into effect in September.
For its part, Google in a Senate hearing in April said its fee structure is in line with industry standards. Further, revenue from Play Store commissions goes toward developer tools and Android updates. Apple has made identical claims in the past as part of its many legal battles over App Store management.
Unlike users of Apple's iOS, however, Android device owners have the option of purchasing apps from other app stores or sideloading software directly from the web.
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Filed in California federal court, the suit is led by Utah, North Carolina, Tennessee, New York, Arizona, Colorado, Iowa and Nebraska, reports Politico. It is the latest in a string of antitrust challenges against the search giant, which saw three similar actions in 2020.
In October, the U.S. Department of Justice filed a suit targeting Google's outsized power in mobile search. December saw 15 states and territories file suit against Google's advertising business, while a second action backed by 38 states and territories again took issue with the firm's search engine.
Today's antitrust suit deals with Google's Play Store fee sharing structure, which currently demands developers pay a 30% commission on sales of digital goods and services. The company recently adopted a fee schedule that drops the rate down to 15% for the first $1 million app makers earn in a year.
Google's reduced commissions came after the company said it will more strictly enforce a policy that requires developers to use its billing system for purchases made through the Play Store. The announcement sparked intense pushback from the likes of Netflix, Spotify and Match Group, which have avoided Google's commissions. That change is set to go into effect in September.
For its part, Google in a Senate hearing in April said its fee structure is in line with industry standards. Further, revenue from Play Store commissions goes toward developer tools and Android updates. Apple has made identical claims in the past as part of its many legal battles over App Store management.
Unlike users of Apple's iOS, however, Android device owners have the option of purchasing apps from other app stores or sideloading software directly from the web.
Keep up with everything Apple in the weekly AppleInsider Podcast -- and get a fast news update from AppleInsider Daily. Just say, "Hey, Siri," to your HomePod mini and ask for these podcasts, and our latest HomeKit Insider episode too.If you want an ad-free main AppleInsider Podcast experience, you can support the AppleInsider podcast by subscribing for $5 per month through Apple's Podcasts app, or via Patreon if you prefer any other podcast player.
Comments
Interesting they have triggered the same “we want your store but we don’t want to pay for it” when other stores & direct distribution are available. Almost as if the idea of using something and not paying for it is unreasonable.
https://ag.ny.gov/sites/default/files/utah_v_google.1.complaint_redacted.pdf
Part of what is being alleged is that Google advertised Android as being "open" while using a host of strategies to ensure that it wasn't really "open". There are a lot of details about Google's alleged tactics to undermine side loading and alternate app stores in the PDF. According to the filing, Google controls over 90% of the market and no alternate app store has more than 5%. But in a nutshell, that's a big part of the lawsuit: what Google claimed to the public/market/developers versus what they were actually doing. This lawsuit is specific to licensable operating systems. Since iOS is proprietary, it's not included in this particular action.
One thing that is similar to Epic's lawsuit against Apple is the idea that requiring developers to use Google's 1st party billing for in-app purchases is an "illegal tie".
https://blog.google/outreach-initiatives/public-policy/lawsuit-ignores-choice-android-and-google-play/
I would think it a certainly that if at the end of all this Google Play must open itself to more competition and less control of the financial side then it's a given that Apple must make even more changes. That's why I found it odd they are complaining about Google and not Apple...
... unless the idea is to go after the one with legal question marks around their app store first so there's no question at all about the second even more controlling one. Otherwise the lawsuit seems strange and misdirected. In any event I have little doubt Apple is rooting for Google on this one.
11. Google owns the majority of the mobile apps on the market today. (Sensor Tower)
With apps like Maps, Hangouts and YouTube, Google LLC owns the majority of apps published in both the Google Play Store and the Apple App Store. Google is creating apps to improve the experience of users and strengthen their connection to the brand. It’s a great business move, and you don’t have to be Alphabet to do it.
https://mindsea.com/app-stats/
and;
https://www.theverge.com/2021/7/7/22549338/apple-google-apps-comscore-study-facebook
"fIf you use an iPhone or Android phone, chances are the majority of your most-used apps were made by Apple and Google.
That’s the takeaway from a new Comscore study that ranks the popularity of preinstalled iOS and Android apps, such as Apple’s Messages, alongside apps made by other developers. The results show that the majority of apps people use on their phones in the US come preinstalled by either Apple or Google. The first-of-its-kind report was commissioned by Facebook, one of Apple’s loudest critics, and shared exclusively with The Verge."
YMMV
I would suggest that merely allowing third party app stores is not sufficient to avoid regulatory scrutiny. If it looks like a duck, and walks like a duck...
Great if you only operate in USA, but if you are want to be successful in the world then it appears that the American government wishes to stop that happening. (Read EU instead of USA if it applies).
Great for all the rest of the countries who's companies cannot achieve the same high success.
Hopefully all governments are behaving the same so we are all equally disadvantaged.
https://finance.yahoo.com/news/google-saw-samsung-app-store-103312380.html
The bigger issue is that Google might be using their market power to place competing app stores at a disadvantage, discouraging large developers from placing their apps in a third party app store and discouraging third parties from opening an app store. This at the expense of more competition and choices for developers and Android users. Even though Google makes a big claim that Android is "open". This would clearly be a violation with anti-trust laws that been around for a century, if true. Microsoft was charged for doing about the same to Dell and other large computer makers.
However, with Apple, new anti-trust laws must be passed in order to assure that Apple actually has a "monopoly" with their App Store, in a "market" that they completely own by the mere fact that iOS is their IP that is only used on their iDevices and it's only 23% of the "market" that should be considered, when addressing any anti-trust violations, under the old laws. Its only under the new laws, if they pass, that Apple has a "monopoly" with their App Store as iOS would be considered a "market" that would fall under anti-trust laws as it's an online platform own by a company with over $600B market cap AND with over 100M MAU (monthly active users).
Remember, under old anti-trust laws, having a monopoly or monopoly power, is not illegal and not subject to regulations, so long as they are not abused. Making too much profit by charging what would be considered industry standard or the rate everyone else is charging, is not considered being anti-competitive. And a "market" does not consist solely of customers that choses to use one company's ecosystem, product or IP. The new laws aimed at big tech, will change all that.
Google was wide open in the beginning and started to lock things down after Android took off. Before then Android was offered as a free and open source OS. It no longer is.
That’s a classic anti issue for Google.
However, it’s a fact that Google has been locking down Android for years now, after initially offering it as free and open source. This is where the antitrust issues come from.
Since the only relevant market is the US where iOS is the dominant player in all app categories from revenue to available devices to total number of apps, that does not explain the AG's targeting Google and their Play Store. It's by far the smaller in terms of coverage, control, and app revenues. IMO Apple has also tightened its control thru ongoing changes in developer rules over the past few years, and tighter hold on payments and the rules governing it, and the marketing of apps outside of the AppStore.
Google Android is unquestionably the less-locked-down with millions of US Android owners having access to and/or using alternative app stores to Google Play such as Amazon, Aptoide. GetJar and Opera Mobile. Yet it's the smaller, less restrictive market of Android and Google Play being targeted by a lawsuit?
This seems more politically motivated than protecting consumers from paying too much for apps.
Google's argument is essentially the same as Apple's as it pertains to their respective app stores:
"In a blog post, Google dismissed the suit as "meritless," saying the changes the plaintiffs demand for its Google Play store risk "raising costs for small developers, impeding their ability to innovate and compete, and making apps across the Android ecosystem less secure for consumers."
"This lawsuit isn’t about helping the little guy or protecting consumers," the company said. "It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it."
If that makes sense for Apple, and the overwhelming opinion held here is that it does, why would it not equally apply to Google?