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Google has a 'steep hill to climb' with its Play Store lawsuit

Google is hit with another lawsuit, this time targeting its Play Store for being anti-competitive and monopolistic. Some experts say that Google will have a "steep hill to climb" to battle this fight, and instead of trying to "point the finger at others," it needs to start proving its worth.

Last week, New York Attorney General and a coalition of 37 state attorney generals slapped Google with a lawsuit alleging that the Play Store has an unfair hold over app distribution on Android and that Google discourages the use of third-party app stores. It also claims that Google puts its own apps ahead of the competition by giving them prominent placement on the best Android phones as pre-loaded apps.

"Through its illegal conduct, the company has ensured that hundreds of millions of Android users turn to Google, and only Google, for the millions of applications they may choose to download to their phones and tablets," Letitia James, New York Attorney General, said in a statement. "Worse yet, Google is squeezing the lifeblood out of millions of small businesses that are only seeking to compete."

While many experts say that the lawsuit is very similar to the Epic Games trial against Apple, which states similar allegations, Sally Hubbard, director of enforcement strategy at the Open Markets Institute, an anti-monopoly think tank, said in an interview that, unlike that trial, this case is likely easier to fight in court.

"It is very similar to Apple. But the complaint involves some agreements that were imposed by third parties like phone makers," she said.

"It's easier to go after anti-competitive conduct when there's an agreement as opposed to when it's just Apple doing things unilaterally on its own; it's usually a harder case," Hubbard said.

And while Epic Games is in the middle of a fight with Apple, it also sued Google for antitrust violations. In that lawsuit, Epic Games alleged that Google forced phone manufacturer OnePlus to break off a deal that would have seen a special Fortnite launcher preinstalled on OnePlus phones.

Per the lawsuit documents: "Google was 'particularly concerned that Epic Games app would have ability to potentially install and update multiple games with a silent install bypassing the Google Play Store.' Further any waiver of Google's restrictions 'would be rejected due to the Epic Games app serving as a potential portfolio of games and game updates.'"

Hubbard, whose work focuses on Big Tech, explained that unlike Apple, Google licenses its entire operating system to third-party companies, and "no phone maker can sell their phones without the Android operating system, without the Google Play Store and so, therefore, they have to accept whatever terms and conditions Google puts on."

Google has a much tighter control over OEMs than it ever has

She said that this case is entirely comparable to United States vs. Microsoft, in which the U.S. government accused Microsoft of illegally maintaining its monopoly in the PC market by the restrictions it put on manufacturers and users to uninstall Internet Explorer and use other programs like Netscape and Java.

"Phone makers do not have any bargaining power or option to do something else besides what the monopolist is telling them to do," she said.

Neil Shah, vice-president of research at Counterpoint Research, said in an interview that because there's an app store duopoly — iOS and Android, almost having similar payment and revenue structure for app developers — the narrative has to be balanced. That means that if Apple is accused of monopolistic behavior, then Google deserves to be hit as well, he said.

The problem for developers is that Google has integrated its platform so extensively that it's becoming "increasingly difficult for OEMS and developers to bypass Google as it has built a platform which is now much superior and better only when it is integrated with Google services."

In its defense, Google's senior director of public policy, Wilson White, wrote in a blog post that the lawsuit alleges the company doesn't provide other options other than to use Google Play, which isn't accurate.

"Choice has always been a core tenant of Android," White wrote. "In Fact, most Android devices ship with two or more app stores preloaded. And popular Android devices such as the Amazon Fire tablet home preloaded with a competitive app store and no Google Play Store."

Google also noted that the company provides more "openness and choice than others," adding that the Play Store is different from other app stores and "doesn't impose the same restrictions as other mobile operating systems do."

But despite that, the lawsuit states that Android is the "only viable operating system available to license by mobile device manufacturers and sell their devices to U.S. customers." It noted that Google, "which controls approximately 99% of this market," has durable monopoly power in the market and considerable leverage over mobile device manufacturers and Android app developers."

It also adds that the Play Store distributes over 90% of all Android apps in the U.S. and that "no competing Android app store has more than 5% of the market."

In 2020, Google Play users worldwide downloaded 108.5 mobile apps, up from 76 billion apps in 2018, according to Statista. Data shows that the Play Store "generates significantly more downloads than the Apple App Store, as it is available for a wider range of devices than Apple's closed iOS ecosystem, which is only available for Apple devices."

Statistic: Annual number of app downloads from the Google Play Store worldwide from 2016 to 2020 (in billions) | Statista
Find more statistics at Statista

Carl Szabo, vice-president and general counsel of NetChoice, an industry group whose founders include Google, Facebook, and Amazon, said these lawsuits are invalid.

"It's very interesting that this is being brought against Google's App Store when the case is potentially one of the weakest, and that's because the Android operating system allows sideloading," he said. "Every Android device has two or more app stores pre-installed when you get the device. And there are examples of Android-based devices that don't even have the App store of the Play store installed at all."

Szabo, who worked for former FTC Commissioner Orson Swindle, added that the lawsuit questions whether what is alleged really matches the reality, noting that they do not match.

He said that in the case of Epic Games, as soon as the judge dismisses the case, the same will happen to this lawsuit with Google's Play Store.

"The state's attorneys are going to have little or no leg to stand on," he said.

Google has to change its approach

Carmi Levy, a technology analyst, said that Google will have to stop "trying to point the finger at others" and instead focus on telling the story about its own business practices.

"It needs to somehow prove that, despite the accusations, its model offers more opportunity than choiceless despair to Google's often-much-smaller competition, that its rules aren't Draconian at all, and rather are designed to create opportunity and encourage innovation among all players," he said. "It's a steep hill to climb, and in the current climate, I doubt Google's lawyers will find much sympathy in open court given the evidence to the contrary."

He said that the entire app store ecosystem is at stake and how much power Google deserves to have as it balances its own profitability and growth against accusations.

"And while this particular case zeroes in on Google, let's not delude ourselves into thinking the shadow doesn't extend to Apple, as well. Indeed, the entire app store economy will potentially be on trial here because whatever precedent is set here will ultimately impact Apple's platform, as well," he said.

Levy agreed with Hubbard and noted that, unlike Apple, Google has earned by virtue of the fact that it built the platform in the first place and continues to set and enforce the rules.

"When your only choice is to distribute your digital wares through an app store, you have no voice if the company that runs that app store decides to play hardball," he said.

He added that the timing of this lawsuit isn't coincidental as more lawmakers around the world scrutinize Big Tech. And while no one can predict the outcome of this particular lawsuit, Levy says that "Google is no different than any tech company on the wrong side of an antitrust accusation: it disagrees with the charges, will strongly defend them, and will spend as much time, money, and energy as it can to prove its case."

Source: androidcentral

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