Hello.
In 2019, in the United States, the White House, with the support of politicians at various levels, started a campaign against IT giants, in which each company received its own number of applications. Some were accused of exploiting public opinion, others were guilty of moving production to Southeast Asia, while at the same time limiting competition on their platform. The first congressional hearings were like a funny political show, in which the top executives of the biggest companies in the world looked blank. Politicians gave them public clothing, which included both real complaints and false questions showing ignorance on the subject.
Applications from the state always open a window of opportunity; there are companies that use them to their advantage. A striking example is the speech of Epic Games against Apple’s monopoly on its own iOS platform, as well as a parallel lawsuit brought against Google with similar claims. The creator of the popular game Fortnite believed that the conditions of application stores and platforms in general limit competition and make it impossible. All such cases have been pending for years, and court hearings, which began in 2020, are only now approaching decisions made based on the results of consideration of issues.
It is interesting that the pressure on Google is not only coming from Epic Games; over the years, several investigations have been launched against the company in the United States alone, each of which could lead to irreversible consequences, for example, to the division of investigations as such from Google, to separate the advertising business into a separate and independent company.
For example, in early August 2024, US federal judge Amit Mehta decided that Google is a monopolist in the search market, controlling 90% of the search market on computers, 95% of the search market on smartphones. In 2021 alone, Google spent more than $26 billion maintaining its monopoly. The judge’s decisions paved the way for subsequent court decisions, such as liquidating the company or liquidating fines, which could amount to tens of billions of dollars in the best situation. It is impossible to call the situation simple for Google.
Epic Games’ lawsuit against Google’s Play Store monopoly seems strange only to outside observers. After all, unlike Apple, Google allows you to create independent application stores for Android and does not block them. In the same way, you can directly download applications to devices, bypassing application stores, which in Russia ensure that a large number of applications are submitted from companies subject to control- bonds. So what was Epic Games’ appeal?
The essence of the complaint is very simple – Google has created a monopoly, they pay money in one form or another to promote the Play Store, which is the main application store on Android . But the problem is that if you want your application to be in the Play Store and get money from it, you have to use the Google payment system. A third party developer who wants to be present on the Play Store cannot use another payment system.
In court, Epic Games was able to prove and show this connection. Several specific facts occurred during the court hearings. Google “lost most of the emails related to these cases, which the jury interpreted as the company’s intention to hide its data and intentions.” Even if Google was clean and there was no secrecy in the communication, we will never know. In December 2023, in court, Google was found guilty of all counts, which was somewhat surprising.
A similar lawsuit by Epic Games against Apple was closed in September 2021, then Apple was found not guilty and the situation on iOS remained exactly as it was. Epic Games’ victory has revived claims against Apple.
This time, the court was considering actions against Google, which should destroy the link between the Play Store and payments, in fact, these are the consequences of the loss in December 2023. The court decided San Francisco, led by Judge James Donato, that Google used its monopoly position to set its own Play Store rules. According to the court’s decision, the company is obliged to do the following:
- For three years, Google cannot prevent the use of third-party payment systems for applications distributed in the Play Store;
- The company cannot prevent the distribution of other application sources and their download by users;
- Google does not have the right to pay device manufacturers for pre-installation of the Play Store, and they cannot share revenue from the Play Store.
Of course, Google filed an appeal, but the chances of it avoiding a court decision are slim. Google claims that this limits their competition with Apple and puts them at a disadvantage, because Apple has different rules. And here we are on the way to the fact that the loss of Google could hit Apple hard again; the company must open iOS to third-party application sources not only in Europe, but also in all other parts of the world.
Let’s take a look at what it means if there are no restrictions on other app stores. Today you can install any application store on Android; there are hundreds of them in the world in Russia, the most famous application store is RuStore, supported by VK. The disadvantage of RuStore is that it is not a system application; has rights as a regular application. And this means, to apply application updates, you have to go into the application itself and click on the button. While they are on Google Play everything works automatically and in the background (although it all depends on your preferences).
The decision of the American court de facto forces Google to allow third-party application sources in the Play Store and, more importantly, to equalize their rights. The reasoning is that you will be able to download a conditional RuStore or another application store through the Play Store, and they will have the same rights (the court decision does not say this, but the The logic here is obvious, and many companies are clearly fighting for this, including Epic Games).
What’s even worse for Google is the ability of third-party app stores to use their payment system. Control of the application market will disappear, Google’s commission, which reached 30% of payments, may disappear or be significantly reduced. For Google, this means a direct drop in income, which is not as necessary as another point – advertising in free applications, since the company makes good money. Other app stores can create different economic models, promoting apps for free or for less money. In the end, all this means that we will get a real competition, in which Google will lose part of its pie.
Epic Games has said that they plan to release their app store in 2025, which seems like a very short time frame. But the main thing is that it will be clear that this store will be a direct competitor to the Play Store. In fact, we are coming to a situation like in China, where there are dozens of different application sources, with several of them being large and the rest smaller, all of them living within one market. There is no obvious monopolist, which is not bad.
The inability to pay for Play Store pre-installation seems to be another blow to the gut, because today the Google app store is part of the GMS package, which contains several applications, and it is their promotion that Android is free. If you want to use GMS, please put all these apps in a folder on the main screen, add a search bar and so on. Exceptions are made only for the largest partners, for example, Samsung.
We see that the court cases against the monopoly of Google (and also Apple) are reaching the finish line, the current situation will not last long, companies will change the rules of the game. It is at least too early to believe that the monopoly will disappear or be weakened. There are many loopholes on how to do that to maintain your position in the market, remember, for example, other app stores for iOS in Europe, where there are one or two applications and that’s it, they are certainly not a threat to the company. But in general, we come to the conclusion that there will be a big change in the Android/iOS market for the whole world in the coming years. The offensive of American politicians against the IT giants will open a new window of opportunity for everyone.
In Russia, alternatives to RuStore may appear, which will end up in the Play Store, compared to this application store, which will create interesting accidents. And betting can play a role not on the number of applications, but on their interesting selections. At least in the early years, many companies will try to play with their app stores, which will create competition in this sector for the first time. We will see the rapid growth of new players, and then the usual cooling of this market. The Play Store segment will remain dominant, there should be no doubt about it, but third-party companies will grab a large piece of the pie and can take up to 20-30% of the Android application market.
2024-10-10 15:49:00
#court #Android #device #market #exception
