close
Utah economy

Google, industry experts push back Play Store lawsuit by Utah AG

In a political landscape that continues to shake partisan bickering and hostility in Utah and across the country, finding even a small patch of common ground is an increasingly distant prospect.

But a new survey from Pew Research has found that the reddest Republicans and the bluest Democrats share a bogeyman they all would like to see curbed.

Large American technology companies.

And it’s a meme that hasn’t been missed by elected officials on both sides of the aisle who are engaged, at the highest level ever, in efforts to address perceived issues with driving America’s tech companies across. a torrent of regulations, legislation and legal efforts.

Utah is playing an outsized role in a few of these proceedings, including a handful of federal lawsuits that have put some of the biggest tech platforms in the crosshairs.

Earlier this month, Utah Attorney General Sean Reyes announced that his office is co-leading a new lawsuit targeting Google and its alleged anti-competitive practices in the way the company runs its Play Store, the first distributor of applications for phones running on another Google. product, the Android operating system.

The action marks the third multi-state lawsuit that includes Utah among plaintiffs trying to take on major U.S. tech companies for alleged abuses of market dominance. The other cases are against Facebook and another Google lawsuit that focuses on the company’s search functions. While a federal judge dismissed the complaint against Facebook last month, the case is still ongoing and could resume if an amended complaint is filed. Reyes has not been able to cite the costs of the various lawsuits so far, but said it was likely “hundreds of thousands” of dollars.

Reyes said Google is scamming consumers and small businesses by charging unfair commissions, in some cases up to 30%, on things like in-app purchases and upgrades for popular games.

“Google is using its hyper-dominant position in the market to illegally mine additional billions of dollars from small businesses and consumers,” Reyes said at a press briefing. “We believe these are monopoly actions that need to be dealt with immediately.”

Reyes said his office has heard numerous complaints from consumers in Utah, businesses in Utah and businesses out of state about the impacts of Google’s fees, which he says exceed by far more market-oriented commission rates of 2% to 3% charged by others, but smaller. , application distributors. He also called the company for manipulating the Android system to malfunction when running programs sold outside of Google Play, also sometimes referred to as the Play Store, forcing developers to follow Google’s rules.

Google says the claims are wrong and that Google Play operates in a more open fashion than its competitors and chooses not to “impose the same restrictions as other mobile operating systems.”

In a blog post published on July 7, the day the new lawsuit was filed, Wilson White, senior director of public policy at Google, wrote that Google Play operates in an environment teeming with competitors, including some like the Apple’s App Store that surpasses it when it comes to revenue.

“So it’s strange that a group of state attorneys general have chosen to take legal action to attack a system that offers more openness and choice than others,” White wrote. “This complaint mimics an equally unfounded lawsuit filed by big app developer Epic Games, which took advantage of Android’s opening up by distributing its Fortnite app outside of Google Play.”

It should be noted that since the publication of this blog entry, Epic Games’ federal lawsuit against Google has joined the action that Utah is co-leading.

James Czerniawski, Technology and innovation policy analyst at the Utah-based libertarian think tank Libertas Institute, also sees issues with the latest filing against Google, which includes around 30 state attorneys general as co – Complainants from Utah.

A closer look at the overall app vendor market, Czerniawski said, shows that some of the claims on file, including outsized commission rates, just don’t hold up.

“The 30% commission, despite AG Reyes’ claim, is not anti-competitive,” Czerniawski said in a statement. “It’s actually within the perfectly normal range for what you would expect from a store. Whether you look at Valve’s Steam Store, Sony’s Playstation Store, Microsoft’s Store for Xbox (even their Windows Store for PC until recently), Amazon, and Samsung’s Galaxy Store, the commission rates are all in. this range of 20 to 30%.

“It’s also worth noting that Google, Apple and Microsoft have all announced some form of commission rate policy adjustment. This puts downward pressure on this 30% commission rate and it would not be surprising if this top rate decreases in the future. “

Czerniawski also noted that Reyes and his co-plaintiffs should not be so quick to dismiss the legal reasoning behind the Federal Court’s dismissal of the Facebook complaint.

“While Attorney General Reyes is correct in determining that the FTC and States’ outcome against Facebook does not necessarily have a direct impact on his ongoing litigation in this case or others, as these cases involve different issues, it’s not necessarily in the clear either, “Czerniawski said.” The FTC lost to Facebook in part because the federal judge correctly identified that the FTC and state AGs did not succeeded in demonstrating real evidence that was legally sufficient to justify their complaint of antitrust violations.

“The reason that matters for this litigation and other ongoing litigation is that Attorney General Reyes and others will have to do a much better job of demonstrating the harm to consumers if they are to have these cases taken seriously by a court.”

Czerniawski said he keeps a rough tally of federal legislative activity focused on the conduct of U.S. technology platforms and noted dozens of proposals currently focused on the rules that govern the management of social media, such as the article 230 of the Communications Decency Act of 1996, or amendments to existing federal antitrust regulations.

While the data collected in the new Pew report focused on respondents’ feelings about social media platforms, it provides further evidence that consumers, regardless of their political affiliation, mostly harbor bad feelings about social media. About the conduct of large technology companies.

In a survey conducted in late June that included responses from more than 4,700 American adults, Pew found Americans mostly suspicious of how big tech companies work.

“A majority of Americans think social media companies have too much power and influence in politics, and about half think big tech companies should be regulated more than they are now,” it read. in the report, which comes as four top tech executives prepare to testify ahead of Congress about their businesses’ role in the economy and society.

While the majority of Republicans and Democrats in the survey expressed qualms about social media platforms, Pew’s data also reflects some differences among party members.

The report found that “about 8 in 10 Republicans and Independents of Republican leanings (82%) think these companies have too much power and influence in politics, compared to 63% of Democrats and Democrats. Democrats, on the other hand, are more likely than Republicans to say that these companies have about the right amount of power and influence in politics (28% vs. 13%). Small actions on both sides believe that these companies do not have enough power. “

A Utah-specific poll in February this year also revealed broad skepticism of tech companies and a similar partisan difference with Beehive State Republicans who are more cynical than their Democratic neighbors.

For its part in the latest legal activity, Google claims that the vast majority of app sellers pay no commission and point the finger at big developers as the source from which the grievances arise.

“This lawsuit is not about helping the little guy or protecting consumers,” White wrote in his blog post in response to the Google Play lawsuit. “It’s about stimulating a handful of major app developers who want to enjoy the benefits of Google Play without paying for it.

“This risks increasing costs for small developers, hampering their ability to innovate and compete, and make apps in the Android ecosystem less secure for consumers. ”

Mary Cashion

The author Mary Cashion