The antitrust case against Google: it looks too much like Apple

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Google has adopted rules similar to those that Apple Inc.

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requires for its software that powers smartphones and distributes applications to them. This is causing him trouble.

Antitrust case against Google on Wednesday by attorneys general of 36 states and the District of Columbia, according to Alphabet Inc.

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The unit’s Android mobile operating system and its application marketplace, the Play Store, have increasingly evolved into a so-called walled garden. It’s a phrase commonly applied to Apple and how the iPhone maker pushes consumers to stay in its ecosystem of hardware, software, and services.

Google introduced Android in its early days over ten years ago as the “first truly open and comprehensive platform for mobile devices.” Unlike Apple, Google licenses Android and its proprietary apps like the Play Store to manufacturers of mobile devices. Competing app stores can also be developed on the Android platform.

These factors have helped boost the use of Android, which is active on more than three billion devices worldwide and, according to Statcounter, the most popular operating system in terms of internet use.

In their 144-page complaint, attorneys general accused Google of working to lessen competition in the distribution of Android apps and wrest growing sums from developers.

Last year, Google said it would soon require all apps selling digital products or subscriptions to use the company’s built-in billing system to process payments, much like Apple operates its App Store. . Google previously exempted apps that provided digital content that could be consumed outside of the app, such as songs that could be ported to other music players, from the requirement. The company said the change reflected an interest in applying the rules “consistently and fairly to all developers.”

The Utah-led states disputed Google’s claim, saying the move was financially motivated. The rule, which is expected to go into effect on September 30 for existing Android apps, would require companies like Netflix Inc.

and Spotify Technology SA to use Google Play Billing for their streaming services. This would allow Google to collect up to 30% of revenue from digital purchases and subscriptions, according to the lawsuit.

A representative for Netflix declined to comment. A representative for Spotify did not respond to requests for comment.

“This lawsuit is not about helping the little guy or protecting consumers,” Wilson White, senior director of public policy at Google, said in a blog post Wednesday. “It’s about stimulating a handful of big app developers who want to enjoy the benefits of Google Play without paying for it. “

A Google spokesperson declined to comment further.

Proton Technologies AG, a small manufacturer of communications applications, avoided Google’s commission by advising users that they can purchase its premium services through its website and then access them by downloading its free app through Google Play. In September, Google will begin banning ProtonMail from notifying users about this option, said Matt Fossen, a spokesperson for the developer.

“This will affect us negatively as most people find products on app stores rather than signing up directly to the vendor’s site,” Fossen said.

At the end of June, Google said it would force developers distributing new Play Store apps to use its proprietary app publishing format. The Android App Bundle, Google said, provides access to advanced features while potentially reducing the size of the app. Critics said the change prevents developers in this format from installing their own payment processors and avoiding Google’s commission on paid apps, digital goods in-app purchases, and subscriptions.

The lawsuit also said that Google makes the process of downloading Android apps from competing app stores onerous with security warnings and permission requests multiple times in a single installation. Google said its security warnings are designed to protect consumers from the risk of downloading malware. Apple does not allow downloading apps from third party app stores on iPhone and iPad.

President Biden signed an executive order on Friday that he says will promote competitive markets by limiting corporate concentration that hurts consumers, workers and small businesses. Photo: Evan Vucci / Associated press

Software developers and Big Tech critics have focused on the app economy as consumer spending on digital goods and services has increased in recent years. About $ 38.8 billion was spent in the Play Store and $ 72.3 billion in Apple’s App Store last year, according to industrial research firm Sensor Tower Inc., generating billions of dollars. income for both companies.

Apple and Google face lawsuits from developers over their app market practices and have been the target of antitrust scrutiny by U.S. lawmakers as well as regulators in Europe and elsewhere. President Biden also signed a broad executive order on Friday calling on regulators to sharpen the scrutiny of a range of companies, including large tech companies.

Both companies have defended their conduct, including cutting some sales in their app markets, saying the fees help cover the costs of keeping the platform secure, among other things.

The state lawsuit filed Wednesday marks the government’s third action in the past year against Google. Damien Geradin, a European competition lawyer who has studied the evolution of Android, supports antitrust actions against the two companies, but said he believes Apple has so far avoided scrutiny from Google because Google is an easier political target.

“Apple has not exhausted its political capital,” said Mr. Geradin, who represents the Coalition for App Fairness, a non-profit organization formed by app developers, as an external advisor.

He speculated that, regarding Apple, states could await the outcome of an antitrust case involving Apple and the closely-held video game company Epic Games Inc. Epic sued Apple and Google last summer after have launched their hit video game “Fortnite” from their application markets. , citing rule violations.

Some themes presented in the States lawsuit against Google mirror those advanced by Epic. An Epic representative declined to comment on the matter.

David Hoppe, an attorney specializing in media and technology, said the states case is new as the court is asked to look into the details regarding the user experience in software and how these designs relate to suspected antitrust behavior. It also raises questions about whether the legal system is the best place to deal with these issues, he said.

“Do we want the courts to decide the details of how an app works, like what messages are displayed to users,” said Hoppe, managing partner of Gamma Law in San Francisco. “From the consumer’s point of view, I can be frustrated by the barriers put in place. But at the same time, is it the responsibility of the court?

Write to Sarah E. Needleman at sarah.needleman@wsj.com and Bowdeya Tweh at Bowdeya.Tweh@wsj.com

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