New York Times: States Are Right to Rebel Against Big Tech

March 18, 2021 Anti-Monopoly Policies & EnforcementState and Local PolicyTech

As Congress continues its interrogation of monopolistic practices of technology companies, states are getting into the game. Among the first targets on their list are Apple and Google, which together command 100 percent of the market for smartphone operating systems. New bills introduced in several states would threaten the companies’ dominance and represent an opportunity for state leaders to put fairness in commerce at the center of governance.

All apps that iPhone users download pass through Apple’s app store, because Apple doesn’t allow alternative marketplaces. Google uses its own store, which is called Google Play and is preinstalled on most Android phones, to give preference to its own apps over similar apps from competitors. While Google does allow alternative app stores, users must download them.

Both companies retain as much as 30 percent of the money consumers pay both for apps and for the purchases they make within those apps. (Credit card networks typically charge around 3 percent in transaction fees.) Apple made $72 billion last year from app store fees alone, while Google Play earned Google $39 billion, according to a research company called Sensor Tower. This week Google said it would reduce its commission for some app store sales. Both companies are targets of American and Europeaninquiries into monopolies in the technology market.

Last fall Epic Games, the maker of the popular video game Fortnite, sued Apple after trying unsuccessfully to wrest control of consumer payments by adding its own direct payment system to Fortnite. Apple responded by removing the game from its app store, and a trial is scheduled to begin in May.