Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Epic's narrow win in App Store case toughens fight against Google Play rules

EconomySep 13, 2021 08:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Google app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

By Paresh Dave

OAKLAND, Calif. (Reuters) -Android app makers suing to stop Alphabet (NASDAQ:GOOGL) Inc's Google from siphoning up to 30% of their sales received little reassurance about their chances on Friday as a judge allowed a comparable fee charged by Apple Inc to stand.

Developers including "Fortnite" maker Epic Games in the last year took aim at the two biggest mobile app stores, run by Apple and Google. The critics view the fee as needlessly high, costing developers collectively billions of dollars a year, and a function of the two big tech companies having monopoly power.

Google's trial is at least a year away, time both sides could use to hone arguments based on the Apple decision, legal experts said.

In a ruling on Friday following a trial between Epic Games and Apple, U.S. District Judge Yvonne Gonzalez Rogers (NYSE:ROG) required Apple to let developers tell customers about ways to pay outside of its App Store, leading Apple shares (NASDAQ:AAPL) to fall 3.3%. Alphabet dropped 1.9%.

Google's Play store employs rules similar to the ones struck down in the Apple case, limiting developer communications with their customers, and Tom Forte, an analyst at D.A. Davidson, said Google could be at risk, too. He also noted the remaining risk of new regulatory action by lawmakers.

But Gonzalez Rogers allowed to stand requirements that developers bemoan even more. Those rules, including that in-app payments be made on Apple's own system, allow the company to collect its 15-30% fee.

Apple General Counsel Katherine Adams told reporters that her company was "extremely pleased." Epic Chief Executive Tim Sweeney wrote on Twitter (NYSE:TWTR) that, "Today's ruling isn't a win for developers or for consumers."

Vanderbilt Law School professor Rebecca Haw Allensworth said she agreed Gonzalez Rogers' findings were discouraging for the case against Google, while Valarie Williams, an antitrust partner at law firm Alston & Bird, said Google "will likely be encouraged by the ruling." 

The judge said the Apple restrictions allow users to rest assured that the apps they buy for the most part are free of viruses and pornography and that what they paid for will be delivered.

"App distribution restrictions increase security in the 'broad' sense by allowing Apple to filter fraud, objectionable content, and piracy during app review while imposing heightened requirements for privacy," Gonzalez Rogers wrote.

Apple's fee leads to "extraordinary profits," according to her ruling. But if she forced Apple to ease restrictions, the company might struggle to gain any remuneration for providing a platform to developers, she said. Apple's selling point to consumers about having strong security and a centralized system also would be undermined, the judge added.

Its 30% rate, she said, was set "almost by accident when it first launched the App Store" rather than as a result of market power.

Google has made similar arguments of privacy and security benefits as justification for its rules and fee, and it has long followed Apple's lead on commission levels, Google documents revealed in lawsuits show.

With Google's smaller share in the U.S. mobile app market, plaintiffs may have to reframe arguments to succeed against Google. Gonzalez Rogers said Epic's challenge of any commission at all was an unreasonable position versus Apple, and that Epic failed to offer clear evidence of the iPhone maker being a monopolist.

Tweaked arguments may not be enough. The case against Google has been more difficult from the start. Google makes it possible to install apps from other sources, taking away from the monopoly argument. It also historically has been more lenient in enforcing some of its policies.

Google, Epic and attorneys for other developers suing the Play Store operator declined to comment. Utah's attorney general, which is helping lead a related lawsuit by U.S. states, said it is reviewing the judgment.

Epic's narrow win in App Store case toughens fight against Google Play rules
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email