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Apple's "extreme" app policies give Google defense in Fortnite suit



(Reuters) – Alphabet Inc.'s Google LLC has a better chance than Apple Inc. of defeating Fortnite video game player Epic Games in court over its allegations that the two companies violated the law of trust.

Epic sued Google and Apple separately in the U.S. District Court on Thursday, accusing companies of using their dominance to charge app developers an "unreasonable" 30% sales fee and imposing other restrictions that benefit their own businesses.

Almost all of the world's smartphones outside of limited markets such as China come with either the Google Play Store or the Apple App Store.

But proving that Play Store rules violate antitrust laws can be more difficult than with the App Store.

Although Apple requires all apps to be installed through the App Store, Google allows such installation through several different app stores, in one of several key policy differences that can help it beat the allegations of anti-competitive behavior.

Google encourages p hone makers to set the Play Store as the default, and it sets security locks when users try to download from any other options.

These practices draw scrutiny from the U.S. Attorney General, people familiar with the matter have told Reuters. [1

9659002] But in the end, there are alternatives, says Nicholas Economides, an economics professor at New York University who studies online marketplaces.

"Having other alternatives definitely makes it a little harder to say that something is anti-competitive," said Mr. Economides, generally talking about app stores.

"With Apple, things are extreme because there is no alternative at all. This creates a larger potential case. "

Google spokesman Dan Jackson said most Android phones were sold with several app stores installed.

He added that the Play Store, unlike the App Store, allowed users to access apps paid for elsewhere, without requiring developers to include an in-app purchase option for potential new customers subject to the 30% fee.

Google also allows apps to encourage customers to make purchases outside the app to avoid the charge.

Its greater flexibility last year allowed, for example, the dating app maker Match Group to offer its own payment tools in Tinder on the Play Store – a tactic excluded in the App Store.

Match spokeswoman Vidhya Murugesan expressed support for Epic Games' lawsuit against Apple, but declined to comment on Epic's Google archive.

Last year, as part of an investigation by app stores, the Netherlands competition regulator found that Apple's enforcement of its rules "is stricter" than Google's, "and as such, app vendors' complaints focus mostly on Apple."

Developers are more dependent on Apple, with about 70% of US app revenue from App Store users. [19659002] Epic did well financially when it removed Fortnite from the Play Store over a past 18-month period and targeted users to alternative stores, says Shili Shao, who researched app stores over the past year on Yale University's Thurman Arnold antitrust study project.

"Epic has a weaker argument against Google because they have not been limited as much," Shao said.

Many apps are accustomed to Google collecting fees for selling ads with its advertising software, which collects fees as high as 40%. Developers do not have a comparable relationship with Apple.

The advertising industry also provides Google with a unique way to attract frustrated developers.

While refusing to give in to the 30% sales fee for the app, Google Epic offered "favorable terms" on sponsorship and cloud services, according to its lawsuit.

Epic rejected the concession but rival Activision Blizzard Inc took it, the lawsuit said.

Activision, which did not respond to a request for comment, signed a multi-year strategic partnership with Google in January.


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