Analysis: Epic’s narrow App Store victory boosts fight against Google Play rules
OAKLAND, Calif., Sept. 10 (Reuters) – Android app makers suing to stop Alphabet Inc’s (GOOGL.O) Google from siphoning off up to 30% of their sales were scared of their chances on Friday as a judge authorized a comparable fee charged by Apple Inc (AAPL.O) for standing.
Last year, developers, including “Fortnite” maker Epic Games, targeted the two largest mobile app stores, run by Apple and Google. Critics see the fees as unnecessarily high, collectively costing developers billions of dollars a year, and a function of the two big tech companies with monopoly power.
Google’s lawsuit is at least a year away, a time the two sides could use to refine their arguments based on Apple’s decision, legal experts have said.
In a ruling on Friday following a lawsuit between Epic Games and Apple, U.S. District Judge Yvonne Gonzalez Rogers asked Apple to let developers tell customers about ways to pay outside of its App Store, resulting in a Apple shares fall 3.3%. Alphabet fell 1.9%. Read more
Google’s Play Store is using rules similar to those overturned in the Apple case, limiting developers’ communications with their customers, and DA Davidson analyst Tom Forte said Google could also be at risk. He also noted the residual risk of further regulatory action from lawmakers.
But Gonzalez Rogers made it possible to support demands that developers deplore even more. These rules, including the fact that in-app payments are made on Apple’s own system, allow the company to collect its fees from 15 to 30 percent.
Apple’s general counsel, Katherine Adams, told reporters her company was “extremely happy.” Epic chief executive Tim Sweeney wrote on Twitter that “today’s decision is not a victory for developers or for consumers.”
Rebecca Haw Allensworth, a professor at Vanderbilt Law School, said she agreed Gonzalez Rogers’ findings were disheartening for the case against Google, while Valarie Williams, antitrust partner at law firm Alston & Bird, said that Google “will likely be encouraged by the decision.”
The judge said Apple’s restrictions allow users to be assured that the apps they mostly buy are virus and porn free and that what they paid for will be delivered.
“Application distribution restrictions increase security at large by allowing Apple to filter out fraud, objectionable content and hacking when reviewing applications while imposing increased privacy requirements,” Gonzalez wrote. Rogers.
Apple’s charges result in “extraordinary profits,” according to its ruling. But if it forced Apple to ease restrictions, the company could struggle to secure compensation for providing a platform for developers, she said. Apple’s selling point to consumers about stronger security and a centralized system would also be compromised, the judge added.
Its 30% rate, she said, was set “almost by accident when the App Store first launched” rather than because of market power.
Google has made similar arguments about the privacy and security benefits to justify its rules and fees, and it has long followed Apple’s lead when it comes to commission levels, Google documents revealed. in legal proceedings.
With Google’s smaller share of the US mobile app market, plaintiffs may have to rephrase their arguments to succeed against Google. Gonzalez Rogers said that Epic’s challenge of any commission was an unreasonable stance compared to Apple, and that Epic failed to clearly prove that the iPhone maker was a monopoly.
Modified arguments may not be sufficient. The case against Google has been more difficult from the start. Google allows apps to be installed from other sources, thus eliminating the monopoly argument. It has also historically been more lenient in the application of some of its policies.
Google, Epic and lawyers for other developers suing the Play Store operator declined to comment. The Utah attorney general, who is helping to lead a related lawsuit by US states, said he is reviewing the judgment. Read more
Reporting by Paresh Dave; Additional reporting by Akanksha Rana in Bangalore and Stephen Nellis; Editing by Peter Henderson and Daniel Wallis
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