Fines don’t touch the sides; only legislation can curtail big tech monopolies, says GlobalData

Following today’s news that Google will pay app developers $90 million to settle the Play Store antitrust lawsuit;

Sarah Coop, Analyst in the Thematic Intelligence Team at GlobalData, offers her view:

“Paying these small developers* $90 million in damages is a small win, but it does nothing to address the underlying problem of app store market monopolies.

“Google has been draining app developers’ capital for some time. The company charges developers 30% for both app and in-app purchases without offering viable billing alternatives. It took until July 2021 for Google to reduce the app purchase charge to 15%, and that change only affected developers earning under $1 million on the app store. Concessions for smaller developers are positive, but it distracts from the bigger picture.

“Concessions to smaller developers are marketing ploys that allow Google to continue its anti-competitive practices. Google continues to enjoy the spoils of its monopoly of the app distribution market, with Apple its only viable competition.

“Big tech companies such as Amazon, Apple, Meta, Google, and Microsoft have monopolies on the digital world, and the only way to curtail these monopolies is through legislation. Settlements are practically useless, as big tech have the resources to easily absorb the cost.

“Draft legislation, such as the US Open App Markets Act and the EU Digital Markets Act (DMA), could curtail Google’s app store monopoly more effectively. Under the DMA, users will have the legal right to uninstall applications, preventing big tech from preloading its services onto devices. Users will also be able to install apps without using app stores (a practice known as sideloading). This will reshape how Google and Apple manage their app stores.”

“Big tech cannot avoid antitrust probes with back payments forever, and new legislation will create a more open and fair digital market.”

* Defined as ompanies with $2 million annual turnover

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