Multiple States Join Antitrust Lawsuit Against Google Play Store, Citing Pending 30% Sales Commission Hike

Nearly 70% of the U.S. state attorneys general have reportedly joined an antitrust lawsuit filed July 7 against Google and its branded Google Play Store. The suit, which was filed in California federal court, alleges Google is exercising monopoly power with a planned September 30% commission hike on third-party sales of digital goods, i.e. movies and TV shows, in addition to subscription streaming services such as Netflix and Disney+ and Hulu.

Lead states in the suit include Utah, North Carolina, Tennessee, New York, Arizona, Colorado, Iowa and Nebraska — underscoring a trend among conservative states taking on Silicon Valley tech giants such as Facebook, Google and Apple alleging political bias.

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But this suit, similar to litigation filed against Apple’s App Store, is calling out the company’s gatekeeper tactics as non-competitive. Google also faces separate litigation from myriad states regarding its search engine and advertising technology.

Most studios, media companies and over-the-top video platforms use Google and Apple to market their apps to consumers. Apple mandates that anyone using a branded iOS device must access third-party apps through its App Store. For Android device users, Google Play Store has become the default search tool, although consumers can access apps via alternative channels such as Amazon and Samsung.

Google last year began informing companies and services that it would begin enforcing their use of its payment system for all transactions, beginning in September. As the deadline approached companies such as Netflix and Spotify cried foul, which led to Google reportedly proposing a 15% commission on the first $1 million in revenue from video, audio and e-book transactions.

While Apple continues to operate in a closed system, Google does not — a reality Wilson White, senior director of government affairs and public policy at Google noted in written testimony submitted April 21 to the U.S. Senate Judiciary Committee.

In his testimony, Wilson argued that use of the Android mobile operating system, which launched in 2008, is free to anyone and has increased third-party competition as a valuable go-to platform for e-commerce, development and marketing.

More importantly, Wilson contends Google operates the Play Store outside of a bubble.

“Distributors can distribute their app via many other Android app stores, directly to OEMs, or through direct downloads on their websites,” he wrote. “And developers are free to contract directly with device makers [i.e. mobile phone, tablet manufacturers] to preload their apps on Android devices.”

Apple Bows ‘Apple One’ Service Bundles

Since announcing a bevy of branded subscription platforms covering magazines, periodicals, music, video and gaming in 2019, Apple has partnered SVOD service, Apple TV+, with select third-parties to expand distribution. Now Apple is going in-house with platform bundling pricing options.

Dubbed “Apple One,” the bundles range from combinations of Apple Music, Apple TV Plus, Apple Arcade and 50GB of iCloud Storage for $14.95 monthly, to Apple Music, Apple TV Plus, Apple Arcade, Apple News Plus, Apple Fitness Plus, and 2TB of iCloud storage for $29.95 monthly.

The plans were disclosed on virtual event, “Time Flies” on Sept. 15.

“Apple One makes enjoying Apple subscription services easier than ever, including Apple Music, Apple TV+, Apple Arcade, iCloud and more,” Eddy Cue, SVP of Internet Software and Services, said in a statement. “With Apple One, you can access the best of Apple entertainment across all your favorite devices with one simple subscription.”

While Apple has given away 12-month subscriptions to various branded services individually with the purchase Apple hardware devices, the success of Disney’s bundle featuring Disney+, ESPN+ and Hulu likely fast-tracked the decision to look within.

“We have long argued that bundling services is a unique tool that Apple has at its disposal,” Katy Huberty, analyst with Morgan Stanley, wrote in a note last month.

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Indeed, Apple services revenue — driven by music, iCloud and App Store — has skyrocketed in recent years, topping $50 billion annually, or about $12.5 billion every 90 days. Apple Arcade and Apple TV+ continue to struggle — the latter against a field of big-name studio/media competitors chasing Netflix and Amazon Prime Video.

Apple services include:

  • Apple Music, with more than 70 million songs, thousands of playlists, daily selections from music experts, Apple Music radio, and features like time-synced lyrics.
  • Apple TV+, home to Apple Originals such as “The Morning Show,” starring Jennifer Aniston, Steve Carell and Reese Witherspoon. Apple TV+ has already earned over 100 awards recognitions, including 18 Emmy nominations, for its originals — more than any other streaming service in its first 10 months.
  • Apple Arcade, which gives players unlimited access to more than 100  games across iPhone, iPad, iPod touch, Mac, and Apple TV, all with no ads or in-app purchases.
  • Apple News+, which provides premium access to leading newspapers and hundreds of magazines.
  • Apple Fitness+, the first fitness experience built for Apple Watch, arriving later this year. Apple Fitness+ intelligently incorporates metrics from Apple Watch for users to visualize right on their iPhone, iPad, or Apple TV, offering a first-of-its-kind personalized workout experience. Everyone from beginners to committed exercisers can access studio-style workouts delivered by inspiring world-class trainers and underscored by motivating music from renowned artists.
  • iCloud, which keeps customers’ photos, videos, files, and more safely stored and available across their devices.

Apple Letting Some Video Services Bypass 30% App Store Fee

Apple has begun exempting select third-party streaming video services from paying a 30% App Store fee, or “Apple tax,” as SVODs such as Netflix characterize the surcharge.

Apple has long maintained that third-party services generating subscriptions through its iOS operating system be subjected to the fee. Now, it is letting Amazon Prime Video, Altice One and Canal+ skip paying it.

“Apple has an established program for premium subscription video entertainment providers to offer a variety of customer benefits — including integration with the Apple TV app, AirPlay 2 support, tvOS apps, universal search, Siri support and, where applicable, single or zero sign-on,” Apple said in a statement, first reported by The Verge. “On qualifying premium video entertainment apps such as Prime Video, Altice One and Canal+, customers have the option to buy or rent movies and TV shows using the payment method tied to their existing video subscription.”

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The inclusion of French-based Canal+ is noteworthy considering Apple was recently fined $1.2 billion by French antitrust officials. Music streaming service Spotify currently has an antitrust lawsuit against Apple pending before the European Union.

The Department of Justice and Federal Trade Commission under President Trump have ramped up investigations of media/tech companies suspected of violating antitrust guidelines.

Indeed, Netflix reportedly advises iOS users to subscribe to its SVOD platform outside the App Store. Apple, in turn, has cut the fee in half to 15% to some services who members maintain subscriptions through the App Store for more than a year.

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Report: Disney+ App Downloads Topped 31 Million in Q4

Consumer interest in Disney+ continued strong through the end of 2019, with subscription streaming video platform’s app downloaded more than 31 million times in the fourth quarter, according to new data from SensorTower.

The app downloads were more than double the total for the next closest app, TikTok. Disney+ was also the top app on the App Store in the U.S. It ended YouTube’s four-quarter run at No. 1. By comparison, Netflix had nearly 10 million app downloads in the quarter, including 6 million on the App Store and less than 4 million on Google Play.

An app download does not automatically translate into a paid subscription. Netflix, as a matter of new policy, no longer reveals free trial subscriptions.

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According to the tracking firm, Disney+, which launched Nov. 12, 2019, had more than 12 million U.S. installs on Google Play. No app had surpassed 10 million U.S. downloads on Google Play in a quarter since Messenger in 2017.

Disney+ was the No. 9 app by worldwide downloads in Q4 2019. It achieved this despite launching well into the quarter.

The report suggests Disney+ grossed more than $50 million in its first 30 days, even with a seven-day free trial — ahead of SVOD rivals HBO Now and Showtime OTT. Disney+ reportedly earned more than HBO Now’s best month — the latter streaming the final season of “Game of Thrones”.

Worldwide, TikTok, the Chinese-owned social media/music platform, remains the most-popular app with nearly 220 million downloads. This represented a 24% increase over Q3 2019 and 6% growth from the previous-year period.

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WhatsApp remained popular, leading four Facebook-owned apps in the top five. WhatsApp experienced a huge growth of 39% Q/Q in 4Q19, after decreased downloads in the previous four quarters.


Apple Reports Record App Store Holiday Sales

Apple Jan. 3 reported that App Store customers worldwide spent a record $1.22 billion between Christmas and New Year’s Eve and set a single-day record with $322 million in purchases on New Year’s Day 2019.

Apple announced an all-time high in services revenue for the holiday quarter, with all-time records in multiple categories, including the App Store, Apple Music, Cloud Services, Apple Pay and the App Store’s search ad business.

Gaming and self-care were the most popular categories of app downloads and subscriptions during the holidays. Globally, multiplayer games including Fortnite and PUBG were among the top downloaded games over the holidays, along with Brawl Stars, Asphalt 9 and Monster Strike.

Productivity, health-and-fitness and education apps set the tone in the New Year, with 1Password, Sweat and Lumosity topping the charts in their respective categories.

Netflix Hits Q3 Mobile App Home Run

Netflix doesn’t report third-quarter (ended Sept. 30) financial results until Oct. 16, but the streaming video behemoth apparently hit another fiscal home run with its mobile app.

The SVOD pioneer generated $243.7 million in Q3 revenue from its app, which was up 90% from $128.2 million in revenue in the previous-year period, according to Sensor Tower, which monitors the app ecosystem globally.

The company said the Netflix mobile app has generated about $1.4 billion in global revenue from Google Play and the Apple App Store since its inception. Google’s Android OS didn’t offer a Netflix app until 2011.

Indeed, Sensor said Netflix added 50 million app downloads in Q3 — up 36% from last year. The service now has more than 600 million mobile apps installed worldwide.