States sue Google. Waiting for the other shoe to drop on Apple.

From “Dozens of States Sue Google Over App Store Fees” in Thursday’s New York Times:

A group of 36 states and the District of Columbia sued Google on Wednesday over claims that its mobile app store abuses its market power and forces aggressive terms on software developers, expanding the legal challenges facing the internet search giant…

Apple, which operates the other major app store for smartphones, is also under scrutiny for the cut it takes from developers for app sales and subscriptions. Epic Games filed an antitrust suit against Apple last year, accusing it of abusing its market power to charge app makers unfairly high commissions. It is awaiting a decision on the case next month.

As the money flowing through Apple’s and Google’s marketplaces has grown into the tens of billions annually, developers said the companies were charging too heavy a tax for access. Since the two companies’ software controls almost all of the smartphones in the world, they said, developers have little choice but to adhere to their policies and pay the fees…

The lawsuit on Wednesday also puts pressure on how Apple runs its own App Store. While Android allows people to circumvent the Play Store and add apps to their phones through other means, Apple’s mobile software does not. Effectively, it means there is no alternative to putting software on an iPhone without going through the App Store.

My take: It’s just a matter of time. State attorneys general don’t like pass up a chance for a big settlement.

19 Comments

  1. Gregg Thurman said:
    Maybe I’m just a Pollyanna, but I see the value proposition of listing on the App Store to be higher than Google’s Play Store.

    First and foremost the curation that offers protection against a variety of bad actors.

    Second and just as important, curation that denies the mining of personal data.

    And importantly for the developer, a well heeled consumer base that spends much more than Android consumers.

    Opening the App Store destroys the first two differentiators and negatively impacts the third.

    Charging the same developer fees, while doing less to earn them, just makes Google greedy.

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    July 8, 2021
    • Kirk DeBernardi said:
      Apparently size matters.

      This App Store discontent from grumbling developers and the growing calls for anti-trust legislation seems to prove this emphatically.

      Let’s walk through some history; the fee structure has been reduced; Apple’s safety and privacy app curation continues to weld under-appreciated customer trust; the “free app” availability has exploded and now stands dominant; the capability of apps continue to implement an ever-growing viability with each iOS release; anyone can still “app” at nominal charge; the total amount paid to developers continues to grow; the number of apps continue to grow…I could go on.

      All same as at the onset — OR BETTER. So what is now different?

      Alas, because of all of this positivity a discontent arises from too much money being created for the company that created this marketplace — and BTW — sorry they had to do it on their iOS platform to hold trust for it all to simply function properly for the benefit of all.

      So size now matters? If you ask me, it’s all the “other stuff” that matters.

      1
      July 8, 2021
  2. Greg Lippert said:
    Have they all gone mad? Looney Tunes? Cuckoo for cocco puffs?

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    July 8, 2021
  3. Jerry Doyle said:
    Thirty six states & DoC sued Google over its Apps Store operations relative to Developers. One has to ask why not Apple? Perhaps I am myopic in my vision here, but the plaintiffs more than likely believe their case against Apple would not be nearly as solid and strong to withstand the defendant’s challenge. Google denotes correctly that it has not impeded other companies, such as Samsung and Epic Games, to operate app stores for its Android software. Android allows people to circumvent the Play Store and add apps to their phones through other means. I surmise the lawsuit is meritless and will be found so in the end as we see unfolding in the Apple/Epic frivolous debacle brought by Epic and supported by rapacious Developers. I am confident that the outcome of the Apple/Epic case will emasculate fully the lawsuit against Google’s App Store, although Apple’s case has more to do with Apple’s desire to maintain security and continuity of integrity over its OS for the good of its consumers to have a premium experience. Not so with Google.

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    July 8, 2021
    • Fred Stein said:
      Great points, Jerry, especially that Android does allow other stores. This begs the question, of why these other stores don’t provide better results for developers than Google Play?

      It may be that customers don’t want many choices because it adds confusion; and that developers don’t want to pay the extra cost of promoting their apps in multiple stores with no increase in available market.

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      July 8, 2021
  4. Daniel Epstein said:
    Quantity is not quality even when it comes to Lawsuits! I have to read more about the legal basis for the charges. Maybe some forms of Capitalism are illegal in these troubled times.

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    July 8, 2021
  5. Peter Kropf said:
    Hi Jerry,

    I agree with the logic of your predicted outcome. However, I’m puzzled by your confidence about it.

    The Amazon-led antitrust case killed Apple’s attempt to compete against Amazon’s eBookStore monopoly. It also made precedent to support Amazon’s domination of the publishing industry and any other economic entity that Amazon targeted.

    Therefore, I never have confidence in the logic of the courts, the FTC, SEC, or new law.

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    July 8, 2021
    • Gregg Thurman said:
      Therefore, I never have confidence in the logic of the courts, the FTC, SEC, or new law.

      Give that man a kewpie doll. The “law” has been usurped with arguments over the tiniest abstractions.

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      July 8, 2021
    • S Lawton said:
      Exactly how did the verdict in the A0ple ebook antitrust case kill Àpple’s ability to compete in ebooks. I’m case you hadn’t noticed, when it came time for the publishers to LEGALLY renegotiate their contracts, they got the terms they wanted. The only obstacle to keep Apple competing is Apple. If the profit margin isn’t high enough for them, they won’t put out the money. That’s what kept them out of streaming for so long, and letting their tv box be an also ran as well as Dirk and it’s homrpa d.

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      July 8, 2021
  6. Fred Stein said:
    Two more questions:

    Finally who is behind these lawsuits and why? 24 states AGs don’t just wake and say let’s file a lawsuit.

    Aren’t these matter interstate trade? Or in other words, does each state expect to settle for developers who reside only in their state?

    None of this makes sense, except for grandstanding by the AGs, who have real criminals, killing people, stealing, committing massive internet fraud etc.

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    July 8, 2021
    • Jerry Doyle said:
      @Fred Stein: “…. Finally who is behind these lawsuits and why?”

      While the following (below) is not directed at who is behind the lawsuits, it is relative to who may be behind the push in emasculating big tech’s influence.

      I just finished listening to this morning’s segment on “CNBC, Squawk Alley, Tech Check,” to Keith discuss how it is journalists leading the charge against big tech & not public opinion upset with big tech. Keith alleges journalists seek to retain media’s control over public opinion & not to abdicate that control to big tech. This is a most interesting allegation. He used various examples as saying Facebook is as popular as ever among public users. I’m sure that segment will be available later on YouTube.

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      July 8, 2021
      • Thomas Larkin said:
        Two thumbs up. There’s a bigger story there, but don’t count on those journalists (or their employers) to flush it out.

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        July 8, 2021
    • Thomas Larkin said:
      And how about something that actually matters to ‘consumers’. Say, competition, elimination of bloat and price gouging, and transparency in healthcare. I think most of us would be much more impressed if politicians could ever actually come together to do something about that little government created oligarchy fueled by (fill in the blank, what’s in it for the politicians and in particular their campaign coffers and reelection prospects). Public servants? I say bull $#!T

      3
      July 8, 2021
    • Gregg Thurman said:
      None of this makes sense, except for grandstanding by the AGs

      I don’t have the time to research it, but I wouldn’t be surprised to find that the AG’s that joined the suit are all up for re-election.

      Nothing like a little free publicity (at the taxpayers’ expense).

      1
      July 8, 2021
  7. Jerry Doyle said:
    @Fred Stein “…. None of this makes sense, except for grandstanding by the AGs, who have real criminals, killing people, stealing, committing massive internet fraud etc.”

    EXACTLY, my friend! One would think that these attorneys Generals instead of focusing on their political aspirations would be initiating efforts to target cyber security crimes perpetrated on commerce in their respective states & dealing with the Biden administration on strategies to mitigate excessive rise in local & community crimes. Instead, they are seeking publicity by going after big tech’s money where the limelight exists & where they hope to bring home bacon for their states’ coffers.

    1
    July 8, 2021
  8. This current effort to slay a giant, in this case Google, is being orchestrated by a group of lawyers called “Public Citizen.” Ralph Nader started it. Their affiliate, Public Citizen Litigation Group, argues cases before the Supreme Court and expects to fight this app store fee case before that bench. PC is funded by dues and contributions from its members and supporters, foundation grants, and publication sales and does not accept government or corporate funds. I’m certain Microsofties, Epicurians, and more than a few disgruntled app developers are now PC members, supporters, grant givers, and buying up their publications by the crate.
    Lawyers only fight these cases (and most cases) if there is serious settlement money to be won. Even AGs sit there and discuss the cost of mounting a case versus the pockets of the target. Settlements with giant firms make them look like a hero during campaigns for re-election. You won’t hear much said against Etsy or Ebay for example, though they too run markets by their own rules.

    1
    July 8, 2021
  9. One must really wonder how these attorney generals arrived at the Play Store as Google’s skeleton in the closet. How myopic must they be to skip over GOOGs highly invasive Search Engine monopoly that stares most Internet users in the face every day? Kudos to DuckDuck but there’s only 1 AI-powered search engine in the ‘Free World’ so far as the billions (users & profits) are concerned.
    I couldn’t begin to grok the motives of the world’s most used search engine: Baidu. Somehow Baidu, Yandex & Duck et. al barely reduce the power Google wields as the ‘world’s trusted source’ while quickly auctioning our needs to the highest ad bidders or AI.
    In many ways a subset of US & China leadership is starting to imitate the EU. Fencing in tech with poorly-conceived notions of what should and should not take place in new technological advances. This may be one reason why no EU homegrown tech sector can hold a candle to Silicon Valley, Seattle, Austin, No. Virginia, Route 128, The Triangle, Taiwan, China, Japan, and Singapore. Innovation & the substantial public investment required can be stifled by taxes, litigation, poor legislation and ultimately over-regulation. Leaders intent on poking their fattest cash cows would do better to send trained veterinarians than a pack of butchers.

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    July 8, 2021
  10. Daniel Epstein said:
    Having read up a bit more on the story I feel the case so far would rest on the interpretation and importance of Google’s description of an “open” platform which somehow magically doesn’t seem so open anymore. Fairly flimsy concept but you never know how the courts will handle it. Given the dominance of the Google Store in the overall market of Android apps there could be some legitimate monopoly concerns. Also are they self dealing by controlling the ad market, search market and App market. Apple actually never promised an “open” market and has some different issues so they could be a more difficult case for the Anti Trust crowd. I do think the people whispering into the ears of the AG’s about the issues in this case are trying to take get fees lowered just for their own sake. Consumers will likely never see any direct pricing benefit. Basically much of the case against Google has been created out of misconstrued business concepts and we will see how successful this state coalition of attorney’s will be in their arguments.

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    July 8, 2021
  11. David Emery said:
    Well, anyone can sue anyone in the US for pretty much any reason. I won’t worry about this case until it goes to trial AND THEN the judge declines a summary judgement motion brought by Google.

    IANAL, but it wouldn’t surprise me to see a judge rule that state AGs don’t have standing to interfere in private contracts. The AGs have a pretty high bar to bring for standing to bring the suit.

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    July 8, 2021

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