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A federal court recently ordered Google to make it easier for Android users to switch to rival app stores, banned Google from using its vast cash reserves to block competitors, and hit Google with a bundle of thou-shalt-nots and assorted prohibitions.
Each of these measures is well crafted, narrowly tailored, and purpose-built to accomplish something vital: improving competition in mobile app stores.
You love to see it.
Some background: the mobile OS market is a duopoly run by two dominant firms, Google (Android) and Apple (iOS). Both companies distribute software through their app stores (Google’s is called “Google Play,” Apple’s is the “App Store”), and both companies use a combination of market power and legal intimidation to ensure that their users get all their apps from the company’s store.
This creates a chokepoint: if you make an app and I want to run it, you have to convince Google (or Apple) to put it in their store first. That means that Google and Apple can demand all kinds of concessions from you, in order to reach me. The most important concession is money, and lots of it. Both Google and Apple demand 30 percent of every dime generated with an app – not just the purchase price of the app, but every transaction that takes place within the app after that. The companies have all kinds of onerous rules blocking app makers from asking their users to buy stuff on their website, instead of in the app, or from offering discounts to users who do so.
For avoidance of doubt: 30 percent is a lot. The “normal” rate for payment processing is more like 2-5 percent, a commission that’s gone up 40 percent since covid hit, a price-hike that is itself attributable to monopoly power in the sector.That’s bad, but Google a
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