Neither precedent nor Trump can save Big Tech
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan Guilford
NEW YORK, Oct 8 (Reuters Breakingviews) -Alphabet GOOGL.O, parent of search colossus Google, has suffered the latest setback in a long line of legal challenges. After losing a jury trial against game store Epic Games in December, a judge has now ruled that Google must open a key piece of its Android smartphone operating system. Add to that an imminent squeeze from the Department of Justice, and it’s a reminder of how many blows the industry has received under U.S. President Joe Biden. Those hoping for a reprieve if Donald Trump wins back the presidency in November should think twice, though – what’s happening goes far beyond the White House.
The injunction issued Monday orders Google to cease various restrictive agreements that effectively neuter third-party app stores on Android. For three years, the search giant must allow rival stores to be downloaded through its own system and provide users access to this catalog. This follows a jury trial won by Epic, which chafed against the steep cut taken by both Google and iPhone maker Apple AAPL.O of all transactions on their phones. Google says it will appeal.
It’s hugely consequential. Alphabet hives off as much as 30% of the revenue from makers like Epic. And by 2019, the Google Play app store already accounted for $7 billion of the company’s operating income, or a fifth of the total, according to court filings. That tax angers plenty of peers that depend on reaching smartphone users.
In practice, user habits may not change all at once. Still, difficulties for Alphabet will keep coming. A case won against Google’s control of search is awaiting a follow-up trial over what remedies the government will demand. The DOJ’s request, expected Tuesday, could range from nixing revenue-share agreements to a full-blown breakup.
The tech-hostile agenda of President Biden’s antitrust enforcers, Lina Khan and Jonathan Kanter, has drawn much gnashing of teeth: LinkedIn co-founder Reid Hoffmann, a Democratic donor, called for Khan to be fired. The list of lawsuits and blocked mergers has hit everyone from Microsoft MSFT.O to Facebook parent Meta Platforms META.O. A change of administration would matter: merger review could soften; when the Bush administration took over in the middle of the early 2000s case against Microsoft, the push to split it apart ended. But there are much bigger forces pushing against Google and Apple.
That doesn’t just mean laws seeking to open app stores in South Korea, Japan or the European Union, though that’s all happening. Nor does it end at private lawsuits like Epic’s. Smaller tech firms might find themselves gunning for larger ones too. Meta recently unveiled its augmented-reality headset, Orion, following on from similar glasses from social media firm Snap SNAP.N. Their success likely depends on being able to work freely with currently locked-down smartphones.
Venture capitalists and various tech bigwigs might want to personalize this as a fight between innovators on the one side and Khan and Kanter on the other. The truth is, as the DOJ case against Apple effectively framed it, new platforms right now are struggling to be born. Doing so requires pushing aside the restrictions of the old ones for good. That train is going to be hard to stop.
Follow @JMAGuilford on X
CONTEXT NEWS
Judge James Donato of the United States District Court for the Northern District of California on Oct. 7 issued an injunction forcing search engine and smartphone operating system giant Google to make several changes to its app store policies.
Under the ruling, which results from a jury trial won by videogame platform Epic Games in December, Google for three years must refrain from various revenue sharing and restrictive partnership agreements preventing the distribution of third-party app stores. In addition, Google must allow alternative app stores to access its catalog of apps, and must allow the download of competing stores through its own.
Editing by Lauren Silva Laughlin and Pranav Kiran
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
