Google has been tiptoeing around antitrust lawsuits for the better part of the last ten years, and they have found themselves under scrutiny again as 36 states as well as Washington D.C. have accused the company of violating antitrust laws with their Google Play app store. The company has responded to the claims today, calling it a lawsuit that "ignores choice on Android and Google Play."
Here's a breakdown of the key points from Google's response:
- Google Play competes vigorously and fairly
- The complaint limits its definition of the app marketplace to Android devices only. This completely ignores the competition we face from other platforms such as Apple's incredibly successful app store, which accounts for the majority of mobile app store revenues according to third-party estimates. We compete for both developers and consumers, and if we’re not providing them with the best experience on Google Play, they have other alternatives to choose from.
- Android increases competition and choice
- This complaint alleges that consumers and developers have no option other than to use Google Play. But that’s not correct. Choice has always been a core tenet of Android. Device makers and carriers can preload competing app stores alongside Google Play on their devices. In fact, most Android devices ship with two or more app stores preloaded. And popular Android devices such as the Amazon Fire tablet come preloaded with a competitive app store and no Google Play Store.
- Consumers can also “sideload” apps, meaning they can download them from a developer’s website directly without going through Google Play at all. People sideload successful apps like Fortnite, as well as entire app stores like the Amazon Appstore, neither of which are distributed through Google Play.
- Contributing to this openness and choice, we also give developers more ways to interact with their customers compared to other operating systems. For example, Google Play allows developers to communicate with their customers outside the app about subscription offers or a lower-cost offering on a rival app store or the developer’s website.
- Google Play helps developers succeed
- The complaint suggests that Google Play somehow inhibits developers’ ability to grow. Even though developers have a range of distribution options on Android, we’re proud that, as of February 2020, developers had earned over $80 billion through Google Play. And in 2020, the Android app economy, including Google Play, helped create nearly 2 million American jobs.
- We provide resources to help developers build great apps, lower their costs and grow their businesses. This includes tools that help developers reduce testing burdens, run beta tests and monitor their app at scale. We also invest significantly in security. Google Play Protect, our security service, now scans more than 100 billion apps every day; in 2019, it prevented 1.9 billion malware installs.
- The economic model of Play and Android benefits developers
- The complaint is peppered with inflammatory language designed to distract from the fact that our rules on Android and Google Play benefit consumers. We stand behind apps distributed on Google Play, so we do have some rules to keep the store secure, protect privacy and prevent fraud. For example, we have rules around spam, app reviews and inappropriate content. These rules don't harm consumers; they help protect their safety and security. People want and expect this when using their phones.
- Under our Google Play billing policy, the 3% of developers who actually sell digital products or content use Google Play’s billing system and are subject to a progressive service fee: 15% on the first $1 million earned (99% of developers who pay any fee earn less than a million dollars), and then 30% for earnings above $1 million. Some large app developers, like Epic, want preferential rates and want to use their own payment processing system, but that would harm the ecosystem as a whole.
- First, our current business model benefits the overwhelming majority of developers. About 97% of developers today don’t sell digital content on Google Play and therefore aren't subject to a service fee. Less than 0.1% of developers — who are the largest and most profitable on Google Play — are subject to a 30% service fee on some transactions. This lawsuit is essentially on behalf of that 0.1% of developers. Moreover, the complaint conspicuously fails to mention that our fee is comparable to other rival digital stores, including the Samsung Galaxy Store, Amazon Appstore, Microsoft Xbox, Sony PlayStation, Nintendo Switch and Apple App Store.
- Second, a centralized billing system protects consumers from fraud and gives consumers an easy way to track purchases in one place. It also enables us to provide robust parental and safety controls and subscription management tools that are critical to consumer trust.
- Even with these rules, it’s worth reiterating: Developers who don’t like our policies can still distribute their apps to Android users directly or through rival app stores without using our billing system or paying us a cent — and many do.
- A meritless lawsuit that ignores Android’s openness
- We understand that scrutiny is appropriate, and we’re committed to engaging with regulators. But Android and Google Play provide openness and choice that other platforms simply don’t. This lawsuit isn’t about helping the little guy or protecting consumers. It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it. Doing so risks raising costs for small developers, impeding their ability to innovate and compete, and making apps across the Android ecosystem less secure for consumers.
It seems like Google (GOOGL) has a decent case here, as it is entirely possible that the wording of the claims will be government's downfall. We just saw Facebook hit a $1 trillion market cap on news that an antitrust claim has been thrown out, so we may see a similar outcome in this case. While it is obvious that the United States government has lost control of Silicon Valley, the attempts to regulate these mammoth companies will continue. It is very troubling that these companies can afford better legal teams than the Attorneys General of these states or the Department of Justice, but that appears to be the case.
Google has made some solid points in their response, and there is no doubt that they will fight to drag out any legal battle with the United States government as well as the 36 states who are trying to pin them down. With massive market share numbers in search and mobile operating systems, it seems like they would be vulnerable to some antitrust action, but Apple does exist and iOS actually garners the lion's share of the smartphone sector's profits despite not being the unit sales leader.
What do you think? Is Google a monopoly? Is the United States government more useless than last week's DIDI IPO? We want to hear your opinion! Please reply in the Shacknews Chatty comments thread below.