French publishers' U.S. antitrust class action against Apple is largely dismissed, making it economically irrelevant short of successful appeal: Northern District of California

Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California just denied in part--and in economic terms, almost completely--a U.S. antitrust class action brought on behalf of leading French publishers such as Le Figaro and L'Équipe (about that one, see my personal note toward the end).

Here's the decision, which I'll explain briefly:

https://www.documentcloud.org/documents/23977262-23-09-13-order-on-motion-to-dismiss-le-figaro-et-al-v-apple: Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.): Order granting part and denying in part APple's motion to dismiss with partial leave to amend

The court gives the French publishers three weeks (until October 4) to amend their complaint, but they can only amend limited parts that won't change anything about the fact that there's no more serious money left for them to be made even if they won. But in order to turn this into something that has significant economic potential, they need a successful appeal.

In this first reaction, I'm not going to take a position on whether I agree with Judge Gonzalez Rogers. I disagreed with key parts of her Epic Games v. Apple ruling (which is now going to be appealed to the Supreme Court), but her dismissal of Pistacchio v. Apple, a class action over Apple Arcade, was well-reasoned (at least the market definition part).

The introductory part of the decision indicates between the lines a bit of an annoyance with the fact that certain class-action lawyers brought this case shortly after setting a U.S. developer class action against Apple over largely the same issues. This here looked like a double-dipping (as far as the lawyers--not the parties--are concerned). But that does not, in and of itself, render the entire case meritless.

The economically biggest part is that Judge YGR does not allow the French publishers to sue in U.S. court for damages relating to foreign sales. Those publishers obviously have some U.S. revenues, as there are French expats and other people who read one or more of those publications. But obviously most of the money they make is generated in France, followed by other French-speaking parts of the world (such as Québec).

If they go ahead now and take this to trial, the maximum damages award they could ever realistically hope for would still not offset litigation costs. A victory would be somewhat symbolic. The only value they could get value out of a win related to their U.S. revenues would be that this might persuade a French court to rule against Apple in a similar way. But is that going to be worth it? I doubt it.

Earlier this year I highlighted the problem that Apple doesn'T want to be liable in any jurisdiction. Epic Games experienced the same. If app makers sue outside the U.S., Apple says only U.S. courts have jurisdiction, and in the U.S., Apple points to the Foreign Trade Antitrust Improvements Act (FTAIA), which is a law that was enacted to prevent extraterritorial overreach by U.S. courts.

Based on this U.S. decision, the French publishers and others will find it easier to convince foreign courts that they have jurisdiction over App Store abuse claims relating to those non-U.S. markets, despite a choice-of-jurisdiction clause in the contract Apple imposes on app developers. So there may be something positive here.

Another potential strategy for the French publishers would be to bring in additional plaintiffs on the occasion of the amendment, which could be publishers with very substantial U.S. revenues.

When I first commented on the French publishers' U.S. class action, I found one part of the complaint particularly intriguing: they raised the issue of App Tracking Transparency (ATT), a money and power grab by Apple under the pretext of privacy. Judge Gonzalez Rogers allows the plaintiffs to amend their ATT claim if they bring an amended complaint. That may now be another reason to widen the class definition and include publishers with substantial U.S. sales (an amendmend that Apple would presumably oppose, but the plaintiffs could try to get it approved by the court). For publishers, ATT is a huge problem. So maybe the focus will change a little bit. However, the alternative would be to drop this one and bring a new one with U.S. publishers (or UK and other publishers with substantial U.S. revenues) on board from the start, and with a focus on ATT.

I guess something will happen. I don't expect this complaint to just be dropped at this stage without an appeal, amendment, or a new complaint with an ATT focus (or even a combination of two or more measures of that kind).

Personal note: As I mentioned L'Équipe: while I currently have no paying subscription to any media outlet, simply because there are too many around the globe that are relevant to me at different times, L'Équipe is actually one of two publications I plan to subscribe to for the purpose of brushing up my French. I actually learned most of my Spanish from sports newspapers AS, Marca, and Sport. If I subscribed to it through their Android apps, Google would tax my subscription fees...

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Epic v. Google judge chides Google for unrepentance and lying about chat deletion, non-monetary sanctions TBD after April 7 discovery cutoff: implications for United States et al. v. Google

Two months after I wrote that "sanctions loom large" over Google's systematic deletion of chats about legally sensitive topics, that prediction and the fact that this blog has written about the topic more often than any other (non-paywalled) website--see the link list in this recent post--have been vindicated. Yesterday, Judge James Donato of the United States District Court for the Northern District of California, who is presiding over multiple consolidated Google Play Store antitrust cases (brought by Epic Games, three dozen state AGs, Match Group, and class-action plaintiffs), entered his findings of fact and conclusions of law, ordering monetary sanctions first (recovery of attorneys' fees) and announcing that non-monetary sanctions will be determined a little later:

In Re Google Play Store Antitrust Litigation (case no. 21-md-2981-JD, N.D. Cal.): Findings of Fact and Conclusions of Law re Chat Preservation

If this was about the actual merits of the case, that order would amount to

• an entry of liability (Judge Donato finds that Google is guilty of spoliation of evidence),

• a decision on a first minor remedy (recovery of fees, with the exact amount to be determined now), and

• a holding that a remedy of a certain category (at an abstract level, comparable to injunctive relief) is warranted, though more information is needed to make that determination.

• Furthermore, Judge Donato reiterated that a "terminating sanction" won't issue. So what the plaintiffs and Google know now is that there will be a non-monetary sanction that will have an impact on the adjudication of the case (unlike a fee award, which doesn't really matter between those parties), but it won't be fatal to Google's defenses. Comparing this again to a merits decision, it's like a judge saying that an injunction will issue, but it will have to be reasonably narrowly tailored.

Judge Donato notes that "[p]roportionality is the governing concept here." In order to have as solid a factual basis as possible for determining what remedy "fit[s] the wrong," he "would like to see the state of play of the evidence at the end of fact discovery." Fact discovery in this litigation was reopened after Epic and Match were allowed (in mid November 2022) to amend their complaints. As per a stipulation granted by Judge Donato, the cutoff date for that supplemental discovery is April 7 (next week's Friday). Thereafter, "plaintiffs will be better positioned to tell the Court what might have been lost in the Chat communications."

Proportionality must go both ways. Judge Donato "fully appreciates plaintiffs’ dilemma of trying to prove the contents of what Google has deleted." So the really tricky part is still ahead of the court and the parties. The remedy--some jury instruction--must not be disproportionate in terms of penalizing Google to an undeserved extent. At the same time, it would also be unfair if the absence of certain evidence that is totally due to Google's misconduct resulted in inconsequential sanctions.

I believe the minimum hurdle for Epic and its co-plaintiffs will be to show that Google employees likely discussed topics relevant to this particular antitrust litigation--such as "Project Hug" (see the previous link)--by chat. The hurdle for that should not be insurmountable.

The order rebukes the way in which Google has been dealing with this issue:

"Google clearly had different intentions with respect to Chat, but it did not reveal those intentions with candor or directness to the Court or counsel for plaintiffs. Instead, Google falsely assured the Court in a case management statement in October 2020 that it had 'taken appropriate steps to preserve all evidence relevant to the issues reasonably evident in this action,' without saying a word about Chats or its decision not to pause the 24-hour default deletion. [...] The Court has since had to spend a substantial amount of resources to get to the truth of the matter, including several hearings, a two-day evidentiary proceeding, and countless hours reviewing voluminous briefs. All the while, Google has tried to downplay the problem and displayed a dismissive attitude ill tuned to the gravity of its conduct. Its initial defense was that it had no 'ability to change default settings for individual custodians with respect to the chat history setting,' [...] but evidence at the hearing plainly established that this representation was not truthful."

In other words, Google's lawyers are liars according to the order. That's harsh, but it doesn't look like this is formally going to have an impact on the severity of the non-monetary sanctions to be ordered in the coming months. It is, however, the kind of stuff that will hurt Google when it appeals the decision, which I'm sure it will. Google even likes to appeal decisions prior to final judgment, and in another context but related to this litigation it succeeded to the extent that the United States Court of Appeals for the Ninth Circuit accepted to review a consumer class certification now. On that basis, Google has asked the court to postpone the trial in this litigation (PDF), and in a Twitter thread I agreed that Google had a point:

Google is not saying that the litigation as a whole should be put on hold; it's just about the trial. I consider the motion self-serving BUT reasonable.

Google is under pressure here because of the Google Chats issue involving even its CEO, see https://t.co/ceMJDvbLxG

🧵5/5

— Florian Mueller (@FOSSpatents) March 17, 2023

I want Epic and the other plaintiffs to prevail, and Google is not really concerned about litigation economics, but the fact that the Ninth Circuit is reviewing the class certification decision at this stage does warrant a postponement of the trial in my opinion.

Let's briefly also talk about what this means for the other Google antitrust litigation in which the same spoliation-of-evidence issue is now on the agenda: the first United States et al. v. Google case (in the District of Columbia). A little over a month ago, I commented on the DOJ's motion for sanctions. Meanwhile, Google has filed its opposition brief, which just like in the Northern District of California is the epitome of denial:

United States of America, et al., v. Google (case no. 1:20-cv-3010-APM, D.D.C.): Memorandum in Opposition to Plaintiffs' Motions for Sanctions

Meanwhile the DOJ and the plaintiff states have replied in support of their motion, but those documents are sealed for the time being. Anyway, I doubt that Google will be able to persuade Judge Amit P. Mehta to deny that motion in D.C. without an evidentiary hearing. The San Francisco decision isn't binding on him, but strongly suggests that there is an issue to be addressed.

Interestingly, some of the evidence of Google's systematic deletion of chats that the plaintiffs in the Northern District of California present is actually related to topics at issue in the D.C. litigation over Google's search engine monopoly, such as its revenue sharing agreements (RSAs). The last document I'll show you here was just filed a couple of days ago, and it's an unredacted version of a brief by Epic and its co-plaintiffs. I already published the redacted version in my most recent post on that California litigation, U.S. states, Epic Games, others accuse Google CEO Sundar Pichai of 'routinely opt[ing] to move ... to history-off [c]hats to hold sensitive conversations' in violation of retention obligations. The unredacted document makes it a little clearer what happened there, and the fact that Google's CEO himself sought to delete a message is quite interesting. Also, the unredacted material shows that Google employees were quite aware of what they were doing and why, and in at least one case someone even used a smiley, which is totally inappropriate when enaging in spoliation of evidence. Judge Donato apparently wanted that material to be made public first before issuing his order, given that his order makes even more sense against that backdrop. Here's the unredacted document with lots of exhibits:

In Re Google Play Store Antitrust Litigation (case no. 3:21-md-2981-JD): Unredacted Version of PLaintiffs' Supplemental Brief on Google's Chat Production

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Google's Android compatibility rules likely dictate patent infringement by device makers: patent trial scheduled for late June has ecosystemic implications

It's been about eight months since I reported on K.Mizra v. Samsung, a patent infringement case pending with the Landgericht Düsseldorf (Dusseldorf Regional Court) over a patent on a method to predict the remaining battery runtime of a mobile device.

I've checked on the status of that litigation again, and a spokeswoman for the Dusseldorf court has meanwhile confirmed that the trial (case no. 4c O 27/22; Presiding Judge: Sabine Klepsch) will be held on June 29, 2023. I would recommend to Samsung's competitors--other Android device makers--to dispatch lawyers and keep an eye on this case. Samsung may be the first company that has to defend itself against this patent, but my research indicates that Google requires all Android device makers to implement that kind of power consumption analysis.

The patent licensing firm that is asserting EP2174201 on a "method and system for predicting the power consumption of a mobile terminal" means business: last summer they won an infringement ruling in Munich against Niantic, the Google-Nintendo joint venture behind the popular Pokémon GO mobile game, over another patent that equally resulted from the research efforts of a reputable and sizeable Dutch organization named TNO (Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek; Netherlands Organisation for Applied Scientific Research).

What I find particularly interesting here is that Google contractually obligates Android device makers to take certain technical measures that--according to my understanding of the patent--likely result in acts of infringement. Google's Android compatibility rules have drawn regulatory scrutiny, particularly in the EU and India. The Competition Commission of India put it bluntly: device makers choose "between signing a non-negotiable [contract] and commercial failure." This blog is critical of Google's abuse of market power in various ways, but with respect to compatibility rules, I've consistently advocated distinguishing between specifications that clearly are in the interest of consumers and/or app developers, and those that use "(anti-)fragmentation" or other pretexts for exclusionary practices, such as by disadvantaging rival app stores, search engines, or map services.

The compatibility rule at issue here is non-abusive: no exclusion, self-preferencing, tying, or other market distortion. Apart from the infringement problem I'll discuss below, its effects are purely positive:

• Users want to plan when and where to recharge their phones.

• Device makers strives to provide the best user experience (UX) possible.

• Google's Android competes with Apple's iOS on UX.

• App makers like me know that if our software is a "power hog" (a term also used by Qualcomm in an interesting paper on the subject), some users may find out about it or read or hear about it, and delete our apps for that reason. In the worst case we face a stern warning from the gatekeeper--Google--that an app will be ejected from the Google Play Store unless a problem of excessive power consumption is addressed.

  When we make apps, we obviously take a look at power consumption as we test pre-release versions of our software. It's pretty normal that an app is a power hog during the early stages of development, but energy efficiency is one of the most important aspects of optimization. As developers we know that our own usage pattern may differ greatly from real-world usage. That's why it's important that what the actual end users do is analyzed locally by Android. Google's Android Compatibility Definition (ACD) says:

  A more accurate accounting and reporting of the power consumption provides the app developer both the incentives and the tools to optimize the power usage pattern of the application.

Google ensures that Android device makers measure and provide data points relating to power consumption. It's about the power drain (per unit of time) of what in the claim language of the patent-in-suit is called a "terminal activity", such as WiFi data transfers, cellular data transfers, CPU usage for certain computations, or using a display in ambient mode. Device makers presumably perform such measurement under laboratory conditions and generate a "per-component power profile" as Google calls this in its Android Compatibility Definition (ACD).

Those data points are then used on a device for the purpose of predicting the remaining battery runtime based on a user's particular usage pattern, which naturally evolves as a given user's preferences change and new apps (or new version of existing apps) may drain more or less battery power. Android keeps track of what in the claim language is called "user activities" such as watching a video, downloading a document, placing a voice call, or playing a particular game. Android also knows what terminal activities a given user activity involves. Based on

• the terminal activities that different user activities entail,

• a given user's usage pattern, which will trigger a particular mix of terminal activities, and

• the power consumption of the various hardware components (found in the per-component power profile I mentioned before),

Android can then estimate the per-time power consumption during the remainder of the current battery cycle and, ultimately by a simple division, derive the remaining battery runtime.

Those non-negotiable Android compatibility rules are publicly accessible:

Handheld device implementations:

• [8.4/H-0-1] MUST provide a per-component power profile that defines the current consumption value for each hardware component and the approximate battery drain caused by the components over time as documented in the Android Open Source Project site.

• [8.4/H-0-2] MUST report all power consumption values in milliampere hours (mAh).

• [8.4/H-0-3] MUST report CPU power consumption per each process's UID. The Android Open Source Project meets the requirement through the uid_cputime kernel module implementation.

• [8.4/H-0-4] MUST make this power usage available via the adb shell dumpsys batterystats shell command to the app developer.

• [8.4/H] SHOULD be attributed to the hardware component itself if unable to attribute hardware component power usage to an application.

If Handheld device implementations include a screen or video output, they:

• [8.4/H-1-1] MUST honor the android.intent.action.POWER_USAGE_SUMMARY intent and display a settings menu that shows this power usage.

A section of the Android documentation is dedicated to Power Profiles for Android. Among other things, it says:

"Resource consumption is associated with the application using the resource. When multiple applications simultaneously use a resource (such as wakelocks that prevent the system from suspending), the framework spreads consumption across those applications, although not necessarily equally."

Further above I mentioned last year's Pokémon GO (Niantic) patent infringement ruling. That game is a good example of an app that uses multiple hardware components: data transfers (sometimes WiFi, sometimes cellular), camera, display, sound. Augmented reality is a resource-intensive type of application, so the makers of such an app must to make a significant optimization effort to prevent it from becoming a power hog. They need the kind of data that Android can provide by virtue of apparently implementing what the patent-in-suit covers.

While Samsung and Niantic are not affiliated, there are some interesting parallels. Both cases were brought by K.Mizra, both patents were originally obtained by TNO, and Google makes the allegedly infringing software (Android in the Samsung case, the cloud components at issue in the Niantic case). The relationship between Google and either defendant is different, however: Google is a major shareholder in Niantic, while it has imposed its compatibility rules on Samsung, including the mandate of power consumption profiles that has apparently given rise to the Dusseldorf patent enforcement action.

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Japan's competition authority (JFTC) publishes study, finds Apple and Google to abuse superior bargaining position; recommended measures relate to third-party app stores, app tax, app review

Japan is the jurisdiction du jour where Apple and Google have been found to abuse their gatekeeper powers as the duopolistic operators of the two major mobile ecosystems. The Japan Fair Trade Commission (JFTC), with which Apple reached an antitrust settlement in 2021 on the narrow issue of "reader" apps, has released its Market Study Report on Mobile [Operating Systems] and Mobile App Distribution. Some documents are already available in English, particularly a 27-page slide deck that summarizes the findings and recommendations (PDF); others are still being translated.

A week ago I commented on Apple's partly debatable answers to Brazil's competition authority CADE in the Mercado Libre (Livre) case, where Apple was requested to specify parallel investigations in other jurisdictions. I said "[t]he JFTC should do more"--and it has. The market study report published today is a huge milestone. If Apple had been more forthcoming, it would have disclosed that market investigation to CADE. Well, Apple has never been suspected of engaging in overcompliance with regulatory orders...

In the market study on which the JFTC reported today, the competition regulator has correctly identified Apple and Google as a duopoly. The English translation says "oligopoly", which is also correct, but when an oligopoly consists of two, "duopoly" is preferable.

The JFTC makes a clear distinction between conduct that raises concerns under Japan's Antimonopoly Act (AMA) and further observations and recommendations that may require new legislation in order to restore competition.

Potential violations of the AMA relate to "exclusion of competition through self-preferencing", the unilateral imposition of "high commission rates" (app tax), and a concept that is increasingly relevant in Japan as well as South Korea, and possibly also in other East Asian jurisdictions: "abuse of a superior bargaining position".

The English version of the summary doesn't use the word "gatekeeper", but the concept of an abuse of a superior bargaining position has scope for certain abuses of gatekeeper powers--and to the extent that traditional competition law doesn't have enough teeth, Japanese lawmakers could take action. The summary doesn't indicate that the JFTC itself is at the point of submitting a legislative proposal; it may leave that to the ministry in charge. But the following sentence leaves no doubt that app store-specific legislation may indeed be put on the agenda, and possibly soon:

"While it is desirable for Google and Apple to take the following measures, it is effective to secure them by law to the extent necessary to ensure the effectiveness of measures."

Those measures relate to (inter alia) the use of alternative in-app payment systems (the report makes it clear that the commission rates imposed by Apple and Google are supracompetitive), the use of app data for the purpose of "Sherlocking", and user choice with respect to apps (such as default apps or services).

The JFTC also notes that--beyond enforcement action under existing antitrust law--"it is important to take measures in terms of competition policy ... to increase competitive pressure." And it warns that enforcement of existing antitrust rules may be too slow and cumbersome:

"[T]he market definition and the proof of competitive harms may take time, and the verification of issues such as security may require highly specialized knowledge and a large amount of verification work."

In its market study, the regulator correctly identified the problem that switching rates between mobile operating systems are low, and that Android apps don't compete with iOS apps (and vice versa). Also, 97.4% of all Android app downloads in Japan are made from the Google Play Store, which shows that Google faces "[l]imited competitive pressure from other app stores." Sideloading on iOS (which again is entirely impossible on iOS) also exerts "[l]imited competitive pressure" because users commonly download apps from app stores. Web apps are also dismissed as a competitive force as they just can't compete with native apps, and raises the issue of Apple's prohibition of alternative browser engines (which the UK CMA is already tackling, but facing a procedural challenge).

The report notes that Apple does not allow alternative iOS app stores at all, but the policy recommendations clearly include alternative iOS app stores: the JFTC recommends "[p]romoting the entry of new mobile [operating systems] and app store[s]" and says that for Android and iOS smartphone devices, the download of "apps including app store apps" must be enabled "whether or not" Apple's or Google's own app stores are used for that purpose.

Having formally complained over Apple's and Google's app review tyranny, I was pleased to see that the JFTC is aware of some of the issues caused by the gatekeepers' app review regimes.

On the final page of the summary, the JFTC vows to enforce the country's AMA, to work with other government agencies (including ministries) to develop further proposals, to monitor developments, and notes that it is in contact with competition authorities in other countries and regions.

It looks like a Japanese equivalent of the European Union's Digital Markets Act (DMA) is a realistic prospect now--as are further crackdowns on violations of antitrust law as it stands.

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Indian startup association ADIF elaborates on why it doubts Google's compliance with Competition Commission of India's two Android antitrust rulings

This is a follow-up to a January 30, 2023 post, Indian startup association calls out 'Google's strategy to disincentivize ... alternative payment solutions' by making alternatives even more expensive on the bottom line. The Alliance for Digital India Foundation (ADIF), which unlike Google's "Developers Alliance" and Apple's ACT represents real app developers, has meanwhile "d[u]g deeper" and laid out with greater specificity what's wrong with the changes to its Android terms and practices that Google announced in its January 25, 2023 post, Updates to Android and Google Play in India.

If you are interested in the Indian situation--we're talking about the largest Android market in the world by user numbers and (at elast among reasonably large markets) also by market share--I recommend that you subscribe to ADIF's updates via SubStack, read my previous post on ADIF's criticism of Google's announced changes (which contains links to my previous commentary on the Indian cases), but you're also invited to just read on.

ADIF does what I missed in virtually every media report on Google's announcement: they distinguish between the two underlying Indian antitrust rulings. ADIF refers to the September 2022 decision as the "Google Android Bundling Case" and to the ruling that issued the following month as the "Google Play Store Billing Case."

I'm now going to comment on ADIF's specific allegations. For the avoidance of doubt, I much prefer Android over iOS, but I'm also an app developer who brought complaints over both Apple and Google. Still, I try to offer honest and reasonable analysis, and sometimes agree with Google, such as that it should not have to fundamentally change its entire Android business model while those CCI rulings are being appealed. However, if enforcement goes forward, Google must comply even if I'd have favored a partial stay, and ADIF raises valid questions about compliance:

Google Play Store Billing Case

• "Google has made available the alternative payments limited only to purchase of in-app digital content and not app downloads."

  It is correct that Google's blog post only refers to alternative billing systems for "in-app digital content" without mentioning download fees. App developers make more money from in-app purchases than download fees, but pre-download purchases are still substantial. It would be technically much more difficult for Google to support alternative payment methods prior to a download because app developers would have to somehow link their preferred payment methods to the Google Play Store, which is a Google app. Google could argue that developers who desire to bypass Google Play Billing have to offer such alternative payment systems on their website, and then let users "sideload" (install apps directly, without going through the Google Play Store).

• "Though Google has allowed third-party payments through ‘User Choice billing system’, Google would be imposing price-related conditions (through charging commission) on app developers, which is unfair, unreasonable and discriminatory."

  That was the first issue ADIF raised, and I discussed it in my previous post on Google's (non-)compliance. In order for User Choice Billing to work, there has to be a real incentive for end users, i.e., lower prices because of the app tax being evaded. Apple likes to play the same game in the Netherlands (and will likely try it elsewhere).

• "Also, Google is silent on multiple CCI remedies shared in its verdict, relating to ‘non-imposition of Anti-steering Provisions on app developers’, ‘having a clear and transparent policy on data that is collected on its platform, its usage & the potential sharing with app developers’ and the data so collected not to be leveraged by Google to further its competitive advantage’."

  That is true, but Google's blog post didn't claim to be exhaustive. It said: "Here are some key changes ..." (emphasis added). I agree with ADIF that Google must comply with those other parts of the ruling, too, and I'm confident that neither the CCI nor ADIF will let Google off the hook, but I wouldn't fault Google for having focused in its blog post on changes that can be explained more easily than what actually requires the publication of a whole new policy, such as a policy on data collection.

Google Android Bundling case

• "As per the details shared by Google on its blogpost, it does not address the issue of freedom to be given to OEMs for placement of apps."

  In my summary of the related one of the two CCI decisions, I described this part of the order as follows:

  no more "package deal" for preinstallation of Google apps (such as search, Maps, YouTube, and GMail), but à la carte choice for OEMs and free arrangement on home screen

  ADIF is right that Google's blog post does not address this part, but again, that post was not meant to be exhaustive. Sadly, I also have my doubts that Google really will afford Android device makers all those freedoms without all sorts of strings attached, but we'll see and device makers will be in a better position than app developers like ADIF's members or I to raise a potential non-compliance issue.

• "Also, the blogpost does not give any clarity on whether users will be able to easily change the default settings in their devices, multiple times with ease."

  I share ADIF's concern (between the lines) that Google will probably put some roadblocks in the way of changes to the default settings, but let's see.

• "Google has not given any assurance that it will not continue showcasing multiple security warnings which would discourage an average user from downloading any app through side loading."

  On this one I would even go further than ADIF: when I read in Google's blog post that they want to "ensur[e] users understand the potential security risks," I'm pretty sure Google will scare users away from sideloading before they start and/or out of it when they're in the process of installing an app. I already said so in a previous post, and that passage was quoted on Twitter by EU antitrust blogger (@WavesBlog) Simonetta Vezzoso:

  "a streamlined "sideloading" flow that still scares users out of installing such apps may not change much about the extent to which users install apps directly instead of from the Google Play Store" #DMA https://t.co/utrTcUXBHO

  — Simonetta Vezzoso @wavesblog@eupolicy.social (@wavesblog) January 30, 2023

• "Further, the blogpost has not stated that Google will not impose AFA [Anti-Fragmentation Agreement] and ACC [Android Compatibility Commitment] obligations on OEMs, though it mentions updating the Android compatibility requirements."

  Those changes did not lend themselves to being explained in a blog post: Google will have to change some rather complex and detailed sets of rules. From an app developer perspective, I'm not against anti-fragmentation measures as they are also in my interest if reasonably defined and applied. I just don't want anti-fragmentation to be used as a pretext for anticompetitive purposes.

• "Also, Google is silent on multiple CCI remedies shared in its verdict, relating to ‘not denying access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors’, ‘not offering any monetary/ other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services or not selling smart devices based on Android forks’ and ‘not restricting un-installing of its pre-installed apps by the users.’"

  I definitely agree on the last part: Google should have stated clearly that users will be able to uninstall pre-installed apps as they please, which I think is no problem as long as those apps can easily be reinstalled should their removal break other apps that rely on them. As for the negative remedies-- "don't do this, don't do that"--I think there's nothing that Google would have to explain: they just have to desist from those practices, and we can only raise issues if they engage in them regardless.

All app developers--in India and (like in my case) beyond--are indebted to ADIF for its vigilance. I'm sure ADIF won't let Google get away with anything less than full compliance. Some of the issues they've raised are sufficient to argue that Google is presently out of compliance. Other issues fall into the "let's see" category, with some being more likely than others to raise serious issues going forward.

A quick recap of other recent antitrust developments relevant to mobile app developers:

• The U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA) released a report this week on the problems we are all facing in Google's and Apple's mobile ecosystems. It's a good read to get an overview and to read about both sides' arguments. It's not perfect, but resource constraints may be the primary reason for any shortcomings and limitations.

• Apple's response to a question from Brazil's antitrust authority (CADE) regarding antitrust investigations in other jurisdictions makes some debatable claims. Apple does not acknowledge the full extent of the problem.

• On November 6, 2023, the big In Re Google Play Store Antitrust Litigation jury trial will commence in the Northern District of California. Google's adversaries in that case include three dozen state AGs, Epic Games, Match Group (Tinder), and class-action plaintiffs.

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Indian startup association calls out 'Google's strategy to disincentivize ... alternative payment solutions' by making alternatives even more expensive on the bottom line

Reports on Google complying with the Competition Commission of India's Android decision(s) are greatly exaggerated. Let's do a reality check.

I don't mean to bash "the media" because I appreciate how hard it is for tech reporters to keep track of competition enforcement processes with the limited amount of time they can devote to a single topic. Also, I honestly believe many of them do a much better job reporting on those cases in a way that a horizontal audience understands than I (with my focus on a vertical audience) could.

But Google is playing games with the media. It announces "compliance" knowing that the average reporter won't have the time to figure things out before the news cycle is over.

Another issue is not Google's fault, though: there are actually two CCI Google cases that involve issues of relevance to app developers (one ruling came down in September 2022, the other--which affords app developers further protection against abuse--the following month), but too many of the reports I see talk about developments in one of those cases without clarifying the connection with the other (and stating clearly which of the two cases a report relates to, though it can be inferred from the amount of the fine if that one is stated).

In one of those two cases, the Supreme Court of India has allowed enforcement to begin, though Google's appeal will have to be resolved soon. I took the position that some of Google's concerns over having to change its Android business model in India while appealing the decision are not unfounded. Last week Google announced the following changes that it suggests bring it into compliance with the CCI decision(s):

"OEMs will be able to license individual Google apps for pre-installation on their devices.

"Android users have always been able to customize their devices to suit their preferences. Indian users will now have the option to choose their default search engine via a choice screen that will soon start to appear when a user sets up a new Android smartphone or tablet in India.

"We’re updating the Android compatibility requirements to introduce changes for partners to build non-compatible or forked variants.

"User choice billing will be available to all apps and games starting next month. Through user choice billing, developers can offer users the option to choose an alternative billing system alongside Google Play’s billing system when purchasing in-app digital content.

"Android has always supported the installation of apps from a variety of sources, including via sideloading, which involves app downloads directly from a developer’s website. We recently made changes to the Android installation flow and auto-updating capability for sideloaded apps and app stores while ensuring users understand the potential security risks."

That set of changes relates to both CCI decisions. For example, only the first ruling addressed pre-installation by OEMs, and only the second order addressed in-app payments.

At this point it is actually unclear whether any of the steps taken by Google in response ot the CCI's competition enforcement will put an end to Google's monopoly abuse. For example, a streamlined "sideloading" flow that still scares users out of installing such apps may not change much about the extent to which users install apps directly instead of from the Google Play Store.

Another deficiency was immediately clear to me, which is why I wrote the following on Twitter (please forgive the autocomplete mistake in that tweet: I meant "charges", not "charge"):

Startups are not going to benefit at this point: "User Choice Billing" doesn't mean more $$ in app developers' pockets. Google just charts the same commission as always minus what the third-party payment processors will charge. It will take more than that to bring about change. https://t.co/bykRJcTw4Y

— Florian Mueller (@FOSSpatents) January 25, 2023

I am glad to see that the Alliance of Digital India Foundation (ADIF) has meanwhile criticized Google's announcement the same way and in fact even goes beyond: ADIF says "[this] is nothing but Google’s strategy to disincentivize app developers from using alternative payment solutions by ensuring the app developers pay more for not using GPBS [the Google Play Billing System]." ADIF rightly points to the fact that ADIF addressed this by prohibiting Google from imposing any non-FRAND condition on app developers.

I've already criticized the User Choice Billing scheme on several occasions (the following is not even exhaustive):

• September 9, 2022: Google is fragmenting Android with country-by-country rules for third-party billing systems in response to regulation and legislation

• July 20, 2022: Google's new European in-app payment rules insufficient to comply with DMA: overt discrimination against game makers, excessive app tax imposed on everyone

• July 1, 2022: Apple, Google testing limits of Korean law on in-app payment systems by charging 26% commission that renders use of alternative payment systems unprofitable

• May 10, 2022: Google's rapid response to Match Group's U.S. antitrust complaint talks about User Choice Billing--but what is truly needed is Developer Choice

Also, I welcomed the fact that the Dutch Autoriteit Consument & Markt (ACM; Authority for Consumers & Markets) is trying to thwart a similar scheme by Apple.

India is a key market because Google has a 97% market share there, meaning one doesn't even need a single-brand market definition to find Google to have a superdominant market position.

In other Google Android antitrust news, three dozen state AGs, Epic Games, Match Group, and class-action plaintiffs have presented some smoking guns for Google's spoliation of evidence to Judge James Donato of the United States District Court for the Northern District of California.

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Apple argues foreign app developers cannot bring antitrust lawsuits ANYWHERE on Earth: developer agreement requires suing in California, but FTAIA allegedly immunizes Apple

In the previous post I acknowledged that Apple has a reasonable basis to challenge the UK Competition & Market Authority's market investigation reference over mobile browser engines and cloud gaming. But in some other respects, Apple is the Evil Empire, extremely unreasonable, and acts in highly abusive ways.

A class-action lawsuit brought by French publishers over the way Apple's App Store terms and policies affect them puts Apple's utter unreasonableness on full display. Apple unilaterally imposes a forum-selection clause on app developers: Northern District of California. But when foreign developers actually sue there, as do those French media companies, Apple argues that the Foreign Trade Antitrust Improvements Act (FTAIA) bars such claims.

As Epic Games CEO Tim Sweeney once mentioned in a tweet I haven't been able to find again (search is an area in which Twitter has huge room for improvement, and using Google to search Twitter is also suboptimal), Apple's position taking in different jurisdictions often amount to denying liability under the antitrust laws of any jurisdiction. Epic filed lawsuits in the U.S. (where a Ninth Circuit panel is now working on its decision), UK, and Australia, and Apple then moved to dismiss or stay the foreign cases in light of the California action, but in California argued that any remedies could not apply to foreign markets.

If one thinks it through, Apple's positions across jurisdictions are just another expression of the neofeudalist attitude of an arrogant and abusive organization that knows no shame: the tyrannical dictator forces developers to sign agreements that bar them from suing anywhere other than in the Northern District of California, and then tells foreign developers serving foreign target markets that they have no rights under the antitrust laws of the United States "because FTAIA".

In the end, only entities who are not bound by Apple's unilaterally-imposed developer agreement would be able to bring antitrust cases in foreign jurisdictions: competition authorities and, maybe, consumers.

Heads I win, tails you lose. Or: What's mine is mine, what's yours is mine, too. That behavior, in and of itself, constitutes an abuse.

The case (Société du Figaro et al. v. Apple) was already filed in August (in the Northern District of California), Apple responded with a motion to dismiss in October, and as I suggested at the time, the complaint was subsequently amended:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), December 2, 2022: Plaintiffs' First Amended Class Action Complaint for Violations of the Sherman Act, California Unfair Competition Law, and California Cartwright Act

On Friday, Apple renewed its motion to dismiss:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), January 20, 2023: Defendant Apple Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint

Apple describes "plaintiffs' purely foreign claims" as "[t]ransactions between French developers and foreign consumers, made on foreign App store storefronts, in foreign currency, and through a foreign (non-party) Apple entity" as "foreign nonimport commerce, not subject to any FTAIA exception."

Apple says "short shrift" should be given to the French publishers' argument involving the developer agreement's U.S. choice-of-law provision. Apple points to a Second Circuit decision (Lotes Co. v. Hon Hai Precision Industry, the latter being Foxconn, Apple's largest contract manufacturer) where the holding was that a party to such an agreement "remain[s] free to argue that, under the FTAIA, the Sherman Act does not apply to or regulate the conduct at issue in this case."

The 2nd Cir. decision is not binding in the 9th Cir., and therefore not on Judge Yvonne Gonzalez Rogers. One can reasonably disagree with it. But this is just one of several arguments made by the French publishers as to why the FTAIA does not bar their U.S. federal lawsuit with respect to foreign sales.

Those companies also offer their apps to U.S. consumers, but presumably their U.S. revenues are minuscule compared to the ones in France and other French-speaking countries and regions. So the FTAIA would not dispose of the entire case, but if Apple prevailed on its FTAIA argument, it would render the litigation commercially insignificant.

I plan to comment on the other elements of Apple's motion to dismiss as the briefing process unfolds. Apple really doesn't want to deal with litigation over its pernicious App Tracking Transparency (ATT) framework, and argues that the French publishers still don't get market definition right and, in any event, lack standing to challenge ATT. As for the market definition underlying the publishers' App Store claims, Apple expressly reserves the right to oppose their single-brand market definition, but does not raise that question at the motion-to-dimiss stage. What I think may be the focal point of the discussion at the motion-to-dismiss hearing is Apple's argument that the settlement in the Cameron v. Apple developer class-action litigation resolved the key issues, and now the same law firm (Hagens Berman) is suing Apple again, but with different plaintiffs (and now even challenging the reduced 15% app tax).

I'm one of those developers who consider the Cameron settlement's terms extremely unsatisfactory. The French publishers' case has more potential because that's a group of reasonably large and sophisticated plaintiffs who are not going to settle for a Cameron-style set of terms.

By the way, one developer wrote a letter to Judge YGR earlier this month, complaining that even though he's clearly a member of the class and is entitled to "a substantial sum" per the outcome of the Cameron litigation, he was not contacted about the settlement:

Cameron et al. v. Apple Inc. (case no. 4:19-cv-3074-YGR, N.D. Cal.), January 6, 2023: letter from Lionheart Software LLC

It's unknown whether this was just an oversight or clerical error affecting a single developer or whether there's a more fundamental problem.

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European Games Developer Federation supports Microsoft's purchase of Activision Blizzard: position paper is as authentic as it gets

In these times where self-declared app developer associations are often just astroturfers on the payroll of the likes of Apple, it is reassuring that genuine developer representatives still exist and speak out on the issues.

Yesterday, Jari-Pekka Kaleva, the managing director of the European Games Developer Federation (EGDF), published a summary of his organization's observations on Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI). The blog post links to a December 23 three-page PDF document on the same subject.

The EGDF credibly claims to represent, through its 23 member associations that are national trade groups, more than 2,500 of approximatley 5,000 game developer studios in 22 European countries. The EGDF's German member is GAME, which organizes "the world's largest games event": gamescom.

My first observation on the EGDF's observations is that they're perfectly independent from Microsoft. One cannot conclude otherwise: the statement, while ultimately supportive of the transaction in question, says things that Microsoft undoubtedly disagrees with. The EGDF "acknowledges that Microsoft has the ability for anti-competitive market behaviour and has not in the past consistently respected assurances it has given to continue making games published by companies that it has acquired available on rival platforms." The second part must relate to the ZeniMax (Bethesda) acquisition, and to the best of my knowledge, no promises were broken there. Also, the EGDF calls on Microsoft to "compete on content by lowering its 30% platform fee on [its] Xbox."

Furthermore, the EGDF's position paper "calls upon the European Commission" to closely monitor Microsoft's implementation of the EU Digital Markets Act on its Windows operating system and cross-platform Microsoft Store, and to back up the continued availability of Activision Blizzard games on rival consoles and subscriptions "with rigorous compliance and enforcement mechanisms." The EGDF supports the EU Commission's in-depth investigation, but on the bottom line believes the upside outweighs the potential downside:

• The EGDF says something I've also been saying for a while, which is that this deal is key to Microsoft's ability to challenge Apple's and Google's mobile app stores. I agree with the EGDF that "Microsoft is paving the way also for European game industry SMEs [small and medium-sized enterprises] that do not have sufficient financial resources for the upcoming legal fight to defend their new rights against Apple and Google." In October, I was first to highlight a passage from a Microsoft filing with the UK Competition & Markets Authority (CMA) that revealed plans to "shift consumers away from the Google Play Store and [Apple] App Store."

• The EGDF also considers it necessary to have a strong competitor to Apple's "emerging cloud gaming / game subscription service" offerings.

• The EGDF would also like to see Microsoft challenge Tencent as the world's leading game developer and publisher.

It may not be a coincidence that the EGDF drew attention to its December 2022 position paper on the day the European Commission's intent to hand down a Statement of Objections (SO) became known. My interpretation of the Reuters artice is that there still is hope for a constructive solution in the EU. The SO is an important procedural step and a show of force. If it comes down, it will serve as a stern warning to Big Tech companies that their major acquisitions may face stiff resistance. But an SO is not the end of the world either when there are clear procompetitive benefits (such as the ones highlighted by the EGDF) and a will to offer meaningful and justiciable remedies.

I consider the EGDF statement rather significant, but let's not forget about the outcome of a survey of Call of Duty gamers by Chile's competition authority: 61% of CoD players would rather switch games than consoles.

It's more instructive to listen to gamers and small and medium-sized game developers than to Sony.

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Apple's tardy removal of scam ChatGPT app: broken app review is strong argument for breaking App Store monopolies (as Republican House majority intends)

Yesterday the Coalition for App Fairness quoted (on LinkedIn, and via the Washington Post) from an agenda paper by the Republican majority in the House of Representatives the following action item:

"Ensure app stores are not engaging in unfair or deceptive practices against developers without expansive anti-trust authorities for Chair Lina Khan."

Between the FTC and the DOJ, it's actually the latter that is addressing App Store issues. It would be great if the former at least recognized that Microsoft's acquisition of Activision Blizzard can make a major contribution to the #OpentheAppStores effort. But at this stage that may be too much to ask for.

Some people--including some of Apple's and Google's allies--claimed that the narrow Republican victory in last fall's House of Representative elections would spell doom for a revival of the Open App Markets Act initiative (The Open App Markets Act is dead, long live the Open App Markets Act) during the current (118th) Congressional term. It's not going to be easy to put the OAMA back on the agenda. But it's the best proposal that has so far been made by Capitol Hill lawmakers to "[e]nsure app stores are not engaging in unfair or deceptive practices against developers."

Just asking Apple and Google to refrain from such behavior would definitely not be capable of improving the situation. Hard and fast rules are imperative.

Apple's app review is broken for the combination of three reasons:

• It's simply not practicable without major negative effects on the app development process and on many app developers' businesses to have a single company review all apps, and to have more power than governments as rulemakers on what apps (and functionalities) are acceptable.

• Despite its huge levels of profits, Apple employs only a fraction of the number of app reviewers as Google. As an app developer I got the impression that Google--whose app review rules I've also complained of--has developed some better tools for automating parts of the review process, just based on the material (screenshots etc.) that Google sent along with rejection notices.

• Apple's app review is just about enforcement of rules--rules that are largely just designed to strengthen Apple's strangehold on the app economy and to maxmimize user lock-in. If you submit an update to an existing app with new features, they won't care unless those features relate to their economic interests. The moment you create a new in-app purchasing (IAP) item, app review will take longer because taxing app developers is what Apple's app review is primarily about. In one word: greed.

Former app reviewers have criticized the state of affairs. I don't doubt that many of the people working in that department would like to do a good job, but Apple's priority number one is not to do what's best for end users. The only solution is to have third-party app stores so there will be competition among multiple app stores not only on price but also on the quality of app review.

As TechCrunch and others reported, Apple's App Store and the Google Play Store were "flooded with dubious ChatGPT apps": apps that charge end users looking to find a ChatGPT app, which its maker (OpenAI) hasn't published so far. Those apps then monetized ChatGPT through IAP offerings, when in reality anyone can use ChatGPT for free via the web. Some of that scam reached the top of the App Store charts.

After those reports were published, Google reacted, but Apple was slow to respond even with respect to the most successful one of those apps:

Not only is this rip-off app still live on the @AppStore, but Apple's App Store is still running its ad campaign to scam more users. Meanwhile, @GooglePlay seems to have taken the app down.#ChatGPT pic.twitter.com/cUpyPXH6yj

— Mysk 🇨🇦🇩🇪 (@mysk_co) January 10, 2023

As Mysk noted on Twitter, the App Store was even showing ads promoting that app while there were media reports out there flagging the issue:

Now the fake ChatGPT app is gone. But it's kind of funny that while tech websites were warning about this scam, the @AppStore was still showing ads promoting this very suspicious app. It's worth mentioning that @GooglePlay reacted swifter and took the app down first. pic.twitter.com/i0Z5MvndfL

— Mysk 🇨🇦🇩🇪 (@mysk_co) January 10, 2023

TechCrunch updated its article to mention the belated removal of that app, but mentioned that plenty of other apps referencing ChatGPT still remained on the App Store.

It's typical of tyrants that instead of putting out fires quickly, they're too busy celebrating themselves, as did Apple's Eddy Cue in his reflections on last year. No one would deny that the App Store has made a lot of money. It's just that if Apple was not abusing its aftermarket monopoly, app developers would be able to invest even more and customers would get better products at lower prices. If the iPhone had never been created, it might have taken another five years or more for touchscreen phones without physical keyboards to succeed, but it's not realistic that it wouldn't have happened at all. Google showed, albeit as a fast follower, how easy it was to quickly implement that kind of user experience, and Apple's patent assertions failed to kneecap Android. Now, the situation Android is only gradually better, and in my previous post (on Google's efforts to get the enforcement of an Indian antitrust ruling stayed) I stressed the importance of a level playing field for third-party app stores on Android. One company's unreasonableness doesn't justify the other's similar conduct. It would have been possible to have a mobile revolution without an app tax and without an app review tyranny.

Will Apple apologize for having enabled and promoted the scam, and will it automatically refund iPhone and iPad users who were ripped off?

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Google's warning against unintended consequences of Indian antitrust enforcement is not entirely baseless, but third-party app stores and direct installs are needed--and not unprecedented remedies

Unfortunately, some (if not all) documents filed with India's National Competition Law Appellate Tribunal (NCLAT) are not publicly accessible, which is why a Reuters report on a new Google filing is the only source I have at this point on Google's efforts to halt the enforcement of an October 2022 decision by the Competition Commission of India (CCI) (shortly after which another Google antitrust decision by the CCI--with a focus on Android app distribution--came down).

Google told the NCLAT that "[t]remendous advancement in growth of an ecosystem of device manufacturers, app developers and users is at the verge of coming to a halt because of the remedial directions," and that "[n]o other jurisdiction has ever asked for such far-reaching changes based on similar conduct."

Given that the ruling in question--even though (again) we're just talking about the first one of two CCI Google decisions--comes with ten remedial orders, it wouldn't be fair to describe Google's claims as purely alarmist without taking a closer look at each item in terms of whether its enforcement should be stayed pending the appeal:

• The first six remedial orders would topple Android's entire revenue model (Google is so far not selling Android to device makers, but monetizing it through services) and broadly eliminate Google's ability to limit fragmentation (inconsistencies between different Android devices, which I can say from my experience as an app maker is an issue to take seriously without allowing Google to overuse it to the extent where it becomes a pretext). That set of remedies goes beyond the European Commission's Google Android ruling, which was affirmed by an EU court last year.

  Google's allegation that the CCI copied parts of the European Commission's decision is, at best, ironic. No company has stretched the envelope of "fair use" of copyrighted materials like Google (be it in the Google Books or the Android/Java API context). Google's search engine results pages copy parts of other websites, too. The CCI ruling has a lot of original elements (otherwise Google couldn't now claim that the scope of the remedies is unprecedented), including some great wordings. What I can't form a definitive opinion on for lack of access to the record is whether Google is right that the CCI adopted DG COMP's conclusions without having enough evidence in its own case file, but I doubt it, given the decision's references to testimony, particularly evidence provided by Indian companies. If the CCI concluded that its own evidence weighed in favor of adopting similar conclusions as the EC, then that's legit.

  As a Google Pixel purchaser, I have paid Google directly for using Android, but I've also purchased devices from companies like Samsung and (while Google was allowed to grant them an Android license) Huawei. I think it would be fair if each Android devices, regardless of who makes it, came with a fair, reasonable, and non-discriminatory royalty that would go to Google. Without taking a definitive position on the amount, I obviously don't mean a fee in the single digits (in U.S. dollars). By all means, Google should be able to profitably invest in the further development of Android, and I really like Google's innovative capacity and Android's product philosophy.

  Google mischaracterizes the ramifications of the remedial orders: Android development wouldn't have to grind to a halt because Google could react to the new regulatory framework. However, I don't think it's reasonable to require Google to reinvent and fundamentally change its Android business model (which is absolutely doable, but not totally disruption-free) while the underlying decision is under review by a court of law. When additionally considering the risks from potentially unfettered Android fragmentation through so-called "forks" in the Indian market, it's even more important that Google win a stay of the first six remedial orders--and at the end of the appeal, at least the anti-fragmentation part should potentially be tailored to a greater extent.

• The second group of remedial orders (#7 and #8) give Android users the right to deinstall any preinstalled apps, and to select a different default search engine (and to be able to do so easily and conveniently). Those basic user rights are neither overreaching nor unprecedented: in fact, it shouldn't even have taken the CCI order to get there. So Google should not win a stay or reversal with respect to those rights. It is possible that many Indian users will then use local competitor apps and search services to a greater extent, and that may in the long run require Google to look to other revenue sources (particularly license fees from device makers), but I don't see a doomsday scenario: it would be a slow and smooth transition.

• Finally, the third group of remedies addresses the rights of app developers (while also being beneficial to consumers, of course): third-party app stores and a level playing field for direct installs (somewhat pejoratively called "sideloading"). Those measures are absolutely needed. Chances are that Google will charge app developers anyway, and that's an issue that would have to be addressed separately, especially within the framework of the second CCI Google decision. What Google is really afraid of here is that India may become a test market that proves how well open app markets work--at a time when the European Union is working on the implementation of its Digital Markets Act (DMA) and the UK is about to start the legislative process on a similar measure that will give the Competition & Market Authority's (CMA) Digital Markets Unit (DMU) an additional tool to ensure competition in digital markets.

I support Google with respect to a potential stay of six of the ten remedial orders, but not on the remaining four items. And I believe Google should actually embrace any opportunity to make Android more open, which is the only way it can turn around Android's decline in the U.S. market (which obviously has some rather different characteristics from the Indian market).

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Paris Commercial Court declined to find fault in Apple's 30% app tax, referred to EU Commission enforcement of antitrust law and DMA: French government should appeal certain parts

Yesterday it was reported by Reuters and subsequently by other media that the Tribunal de Commerce de Paris (Paris Commercial Court) imposed a fine of approximately 1 million euros (to be precise: €1,090,909) on Apple over some of its App Store terms.

Most of the reporting focused on the fact that some terms--such as Apple's absolute right to reject apps submitted by developers--were deemed unfair ("déséquilibre", i.e., an "imbalance" in trading conditions resulting from one party's superior bargaining power). As an app developer who brought his own complaints over Apple's app review tyranny, I welcome any decision that declares Apple's arbitrary censorship unlawful. However, that's just part of the story. Apple defended itself against multiple claims; otherwise the fine would have been roughly twice as high.

I have meanwhile obtained and perused a copy of the entire 30-part judgment by the Paris Commercial Court's 13th Chamber (trade judges Alain Wormser (presiding judge), Gérard Palti, and Beatriz Rego Fernandez). There are other counts on which Apple prevailed, and which have not received enough attention. As a commentator on these cases, I can't just ignore the unfavorable parts of a decision.

Apple may appeal the million-euro fine, but the French Minister of Economic Affairs and Finance, Bruno Le Maire, may equally--and hopefully will--appeal any unfavorable parts of the ruling to the Cour d'appel de Paris (Paris Court of Appeal).

My overall impression of the decision is that the three-judge panel was simply not interested in tackling some of the more difficult questions, such as the fairness of Apple's requirement that all in-app purchases use Apple's IAP system and the app tax of 30% or more for developers of a certain size (and 15% or more for small ones). With respect to those claims, the court

• finds that the percentage and the collection method were not facially outrageous, claiming without any particular explanation that smaller developers didn't care anyway and larger ones had other ways of reaching customers,

• mindlessly lists Apple's spurious arguments such as that Progressive Web Apps are an alternative to native apps (though it's simply a market reality that they are not), many apps are free and Apple does not tax the sale of physical goods,

• points to the European Commission's responsibility to enforce EU antitrust law against mobile app stores (which is ridiculous given actions that are pending in EU member states such as Germany and the Netherlands), and

• refers to the EU's Digital Markets Act (DMA), which will require Apple to allow third-party app stores.

There are unmistakable signs that the court wanted to sidestep certain questions. The overall analysis in the judgment (most of which is just a summary of the procedural history and the parties' arguments) is skin-deep at best. Referring to the European Commission's enforcement of EU antitrust rules and to the future effects of the DMA (which won't really change anything in the marketplace until 2024 at the earliest) is tantamount to a dereliction of duty.

I wish to underscore that the ruling does not "bless" the 30% app tax. It merely finds that "le déséquilibre significatif n'est pas suffisamment démontré par le Ministre" ("the Minister has not sufficiently shown the allegedly significative imbalance"). And the court specifically declined to analyze Apple's challenged conduct under antitrust law.

The rule changes that the Paris Commercial Court expects Apple to make relate to app review and to appeals of app rejections, but also to Apple's unilateral right to change the terms of the Developer Program License Agreement (DPLA) anytime. The Paris Commercial Court took into account that there are more than 10 million iPhones in use in France and that developers need a way to reach those users. Apparently Google has already been required to make some changes in that regard.

It's remarkable that the case is actually about five years old, and it took the court so long to hand down a rather thin ruling that decided only some easy parts against Apple. The judgment reflects that Apple engaged in stalling. For example, the French government called Apple's motion for a preliminary reference to the European Court of Justice (ECJ) "abusive and dilatory" as it spans 34 pages, raises 16 partly duplicative questions for review, is highly repetitive, and that the motion's sole purpose was to waste the Court's and the French government's time ("APPLE a, de manière abusive et dilatoire, consacré à ces seize questions préjudicielles pas moins de 34 pages de ses écritures, qui comportent moult doublons et répétitions, dans le seul objectif de faire perdre leur temps au tribunal et au Ministre"). Apple's motion for a preliminary reference was denied, but may indeed have delayed the proceedings.

The court also rejected a procedural motion by which the France Digitale industry association sought to support the French government. France Digitale was not allowed to intervene. While that is unfortunate, the court may have had good reasons. Based on what I found out, the representative of France Digitale lacked the necessary power of attorney to engage in litigation, and the petition to intervene was brought at a relatively late stage of proceeding.

Before the Paris Court of Appeal, not only France Digitale could try to file a timely petition to intervene, but so could other parties. It would be great if there could be broadbased support for the French government, possibly also by organizations like the Coalition for App Fairness (which was founded only in 2020, too late for the case before the lower court).

Regrettably, the Paris Commercial Court did grant ACT | The App(le) Association's petition to intervene. ACT receives most of its funding from Apple, and is effectively controlled by Apple, as Bloomberg reported in September. But that masterpiece of investigative journalism was too late for the proceedings in the lower court. The appeals court might take note of those revelations, however.

The French government told the Paris Commercial Court that ACT's intervention was "opaque" ("imprégnée d'opacité") and that ACT and Apple are linked ("ACT et APPLE sont liées"). According to the French ministry, ACT's intervention was "purely opportunistic, dilatory, and completely useless" ("l'intervention volontaire de l'association de droit belge ACT est purement opportuniste, dilatoire et parfaitemente inutile"). Maybe those argumnents will convince the appeals court, especially with ACT itself having admitted to Bloomberg that the majority of its funding comes from Apple.

This litigation by the French government against Apple has been described as part of a trade war that was started by then-President Trump. However, it appears that the case (and especially the investigation that resulted in it) predated the imposition of punitive tariffs on steel and aluminum imports by the Trump Administration. The judgment notes that the investigation started in 2015, which was during the Obama presidency ("La DGCCRF a ouvert en 2015 une enquête relative aux relations commerciales entre APPLE et les développeurs d'application sur la plateforme App Store").

Some French app makers are suing Apple in the Northern District of California. They have meanwhile amended their complaint, and I'll talk about the differences between the amended complaint and the original one on another occasion. The U.S. class action by French publishers is the result of a cooperation between French antitrust attorney Fayrouze Masmi-Dazi and U.S. class action firm Hagens Berman.

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Google appeals certification of consumer class seeking $4.7 billion in damages for Google Play app tax: valid questions about pricing of apps and in-app purchases put before Ninth Circuit

Epic Games and Match Group (Tinder) have made some progress lately in their Google Play antitrust litigation in the Northern District of California. Three dozen U.S. states are also suing Google over its Google Play practices. Then there is also a consumer class action seeking $4.7 billion in damages, claiming that this is the amount by which U.S. consumers overpaid for Android apps and in-app purchases due to the app tax.

I don't doubt that Google's terms and policies for the distribution of Android apps harm not only app developers but also consumers. It is, however, not trivial to determine what portion of the app tax developers would actually have passed on to consumers in the form of lower prices. Google argues that the class action lawyers went too far, and on that basis has appealed to the Ninth Circuit the district court's decision to certify a consumer class:

Ninth Circuit appeal no. 22-80140; Mary Carr, et al v. Google LLC, et al; Petition for Permission to Appeal

This is an interlocutory appeal, and the first decision for the Ninth Circuit to make is whether to grant the petition and hear the case at this stage. In its efforts to get the appeals court interested, Google has provided an outline of why it believes its appeal is meritorious:

• The central legal question here is whether a class can be certified if more than a de minimis number of its members have not actually been injured. Google's petition acknowledges a circuit split in this regard.

  Google cites Supreme Court precedent according to which the predominance requirement for class certification (that issues common to the claims of all class members outweigh the questions relating to individual members' claims) is not satisfied when "[q]uestions of individual damage calculations will inevitably overwhelm" common questions.

  I'm not fully convinced by Google's argument that there should be no class certification at all, but--despite my harsh and frequent criticism of Google's Android app distribution practices--I agree with Google that the class action lawyers' damages calculation is unrealistic.

• Google argues that developers would typically not lower prices if an adjustment did not take the price down to a distinct focal point. For instance, if an in-app purchase costs $0.99, and the reduction of the app tax would allow the developer to charge only $0.82, it's likely that the developer would keep the price at $0.99 because psychologically the two prices are about the same, so demand wouldn't change much and the developer would leave money on the table.

• Google reasonably criticizes the consumer plaintiffs' expert's "one minus share" formula. The expert's starting point is reasonable: the more competition an app faces, the more of the app tax (if it could be saved) would be passed on as savings to consumers. A monopolist will probably just increase its profits; in a fiercely competitive segment, prices will gravitate toward a reduction that more or less amounts to the app tax. But the consumer plaintiffs' expert simply looks at a given app's share in one of the 35 categories to which Google lets developers assign their apps. That is a coarse segmentation. Without substitution, there are no competitive dynamics, and Google reasonably argues that "[e]ven though the children’s game Thomas the Tank Engine and the adult game Doom are in the same 'games' category, they are clearly not competitors, are not marketed to the same consumers, and are not perfect substitutes such that if the price of one increased, consumers would switch to the other in proportion to the app’s share of the category."

  I would actually go even further: even if two games are in the same category, there may be zero substitution for in-app purchases, especially if those are impulse purchases. For instance, if someone plays Candy Crush and wants to spend money to master a level, such as by paying for some extra moves, it doesn't matter that there are literally thousands of other Match Three games out there that may sell five more moves at a lower price.

My take on Google's interlocutory appeal (at this stage): Judge James Donato

• was definitely right that consumers must have a chance to recover damages (especially in light of the Supreme Court's Pepper decision),

• may be right that a class action is the appropriate vehicle, but

• the class certification decision has been based in part on the acceptance of economic theories that Google rightly criticizes and that I, as an app maker, would equally disagree with.

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