Epic Games has won an antitrust lawsuit against Google. The jury finds that Google has acquired and maintains monopoly power in the Android app distribution and in-app purchasing markets worldwide, excluding China, that Google unreasonably restricts transactions in those markets, and that Google Play We found that you are illegally tying your use of Google Play to billing. Epic said he was injured as a result of these actions.
“Today’s ruling is a victory for all app developers and consumers around the world,” Epic said on its website. “This proves that Google’s app store practices are illegal and abuse its monopoly to charge exorbitant fees, stifle competition, and reduce innovation.”
Google, of course, objects to this and says it will appeal the ruling.
“We intend to appeal the ruling,” a spokesperson told The Verge. “Android and Google Play offer more choice and openness than any other major mobile platform.”
But this and similar rulings, along with the European Union’s Digital Markets Law, are slowly but surely eroding the power Google and Apple have to control the distribution and monetization of apps on the mobile platforms they built. The way we install apps on our phones will change in 15 years, and it will change dramatically. The next 15 years will change for people who make money with apps.
But it won’t happen overnight. And it’s not all thanks to Epic’s epic multi-year legal effort.
Steve Jobs launched the iPhone in 2007. In July 2008, Apple introduced the App Store, and in October of the same year, Google launched its Android equivalent, Google Play. Since then, the duopoly of app distribution and in-app monetization nexus has dominated much of the mobile world (with the exception of China), siphoning huge profits from developers and consumers.
In January, Apple’s senior vice president of services, Eddie Cue, said, “Since the platform’s launch in 2008, developers selling digital goods and services on the App Store have generated more than $320 billion in revenue. ” he said. Apple accounts for his 15-30% of most in-app purchases on the App Store. Google drives about $40 billion in sales annually through in-app purchases on Google Play, and accounts for a similar percentage. Most of that is pure profit, excluding store operating and payment processing costs.
But two major initiatives are starting to force Apple and Google to change. In the European Union, the Digital Markets Act requires technology “gatekeepers” such as Google, Apple, Amazon, Meta and Microsoft to “protect companies that allow third parties to interoperate with their services and use their platforms. and share your data with us and all services and products. These include services provided by third parties on the Platform as well as their own services. ” This means third-party app stores will need to get leeway from Google and Apple to operate on a level playing field, and according to the DMA timeline, that needs to happen sometime in 2024. There is.
The second major effort is being led by Epic Games in the US, which has filed a lawsuit against both Apple and Google over antitrust claims regarding fee requirements for in-app payments. This has been going on for more than three years, and although Epic did not win the case against Apple, he did say in court that Apple “allowed developers to offer third-party payment options within their apps.” He now commands people to “do what they do.”
Apple has enabled the feature in some markets where it’s needed, such as the Netherlands and South Korea, but despite the U.S. ruling, it’s slowly coming to fruition due to clashes between international and domestic laws and litigation. The lawsuit claims that the rights of both Apple and Google are definitely being violated. His ability to maintain a lock on one of the most lucrative markets in technology history.
What does that mean?
Eventually, you should be able to get apps from just about anywhere, just like you always did in the desktop era. Eventually, app publishers should be able to choose between their own payment processing system or a third-party payment processing system, just as they always had the choice in the desktop era. This would usher in an era of increased competitiveness in app distribution and monetization, which in turn would reduce fees for Apple and Google.
But both Google and Apple will likely remain the world’s largest app distributors and payment intermediaries for some time, and perhaps for a long time. they are known. they are trusted. These are probably always the safest and easiest, as they have extensive experience scrutinizing apps for malicious code and can easily embed app distribution and monetization deep into the fabric of Android and iOS. It will be an option.
So this doesn’t spell the death of the App Store or Google Play.
But it’s also a warning that the happy days of sitting at the dual center of the mobile app world and making huge profits will be a little less rich. And if we don’t continue to provide excellent and efficient service, we will be exposed to competition.
It will take time and legal wrangling to make all this happen. But it is clear that it is a trend in the courts and industry.
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