Thursday, October 27, 2022

Google confirms EU and UK antitrust investigations of Google Play Store business practices in Alphabet shareholder report and will appeal recent Google Android ruling by EU General Court

Foo Yun Chee, Reuters' Brussels-based EU antitrust expert,

  1. just reported that a Google spokesperson told her about the company's firm intent to appeal to the European Court of Justice (ECJ) the recent judgment by the EU General Court (EUGC; the lower division of the Court of Justice of the EU (CJEU)), which for the largest part affirmed the European Commission's Google Android decision, and

  2. in the same article quoted from a shareholder report by Google parent Alphabet that contains an official confirmation of formal EU and UK antitrust investigations into the company's Google Play Store practices.

As for the first part, the deadline is December 1, 2022. The pleas will be published by the CJEU in due course. At this point, Google can raise only questions of law. To the extent that the EUGC affirmed the Commission's factual determinations, they are now final for the purposes of that case. The most important finding from my perspective as an app developer was that the Google Play Store and Apple's App Store don't really compete because users rarely switch.

The second part--an ongoing Google Play Store antitrust investigation by the EC's Directorate-General for Competition (DG COMP)--is not entirely surprising because Politico already reported in early August on questionnaires that the Commission had sent out to stakeholders. I commented on that revelation at the time. What we know now is that this is not just a preliminary investigation but a full-blown one--and that something similar is going on in the UK. On page 28 of the quarterly report Alphabet filed two days ago, one can find the following information:

"In May 2022, the EC and the [Competition & Markets Authority (CMA) of the United Kingdom] each opened a formal investigation into Google Play’s business practices."

The next sentence suggests to me that a Korea Communications Commission investigation into Google Play Billing, which became known in August, also started in May:

"Korean regulators are investigating Google Play's billing practices, most recently opening a formal review in May 2022 of Google's compliance with the new app store billing regulations."

The shareholder report states Google's position that "these complaints are without merit." While vowing to "defend [themselves] vigorously," they say they "continue to cooperate with federal and state regulators in the U.S., the EC, and other regulators around the world." They could obviously be--and other defendants to antitrust investigations have indeed been--more cooperative, but Google may be willing to go just a little bit further than Apple when it comes to addressing regulatory concerns.

For example, The Protocol's Janko Roettgers today reported that Amazon announced the release of two TV sets running Amazon's Fire TV software in Europe this fall, and attributes this, potentially, to regulatory pressure as a ruling by the Competition Commission of India (CCI) discussed how Google prevented Amazon's Fire OS (operating system) from succeeding in the marketplace, particularly by precluding device makers from making fully Android-licensed devices and products running "forks" (Android derivatives) at the same time. This week the CCI followed up with a second ruling that focused on app developers' rights on the Google Play Store, and once again included some interesting quotes from Amazon's answers to the CCI's questions.

The first Indian antitrust decision (which came down about a week ago) already ordered remedies designed to protect OEMs (device makers), end users, and app developers; the second one, which followed this week, is specifically about app developer concerns. Similarly, but with more time in between, there are now two Android cases in the EU as well, with the first one focusing on the terms Google imposes on OEMs and the new investigation apparently (given that it's about the Google Play Store) addressing the issues facing app developers who are dependent on Google's Android app store.

In retrospect it is now even clearer why Google announced some new European in-app payment rules in August. The official reason was a plan to comply with the Digital Markets Act (DMA), but that one won't really require Google to change much until early 2024. In actuality, it was about that ongoing DG COMP investigation, but as I explained in the post I just linked to, that announcement by Google doesn't really solve any problem.

The Google Play Store is at issue in various jurisdictions. In the United States, 36 U.S. states, Epic Games, Match Group, and some consumer plaintiffs are suing Google over its Google Play terms and practices. Google is currently opposing an amendment to Epic Games' and Match Group's complaints that would add an allegation of a per se antitrust violation (in EU terminology that would be called "restriction of competition by object").