Two recent lawsuits against Google's App Store have brought information to light regarding the company, its success, and future endeavors.
Google is swimming neck deep in quite a few lawsuits. While lawsuits are commonplace for nearly every major corporation, they don't always loom so large. A total of 37 states in the US are suing the company over antitrust violations. The government of Australia has threatened legal action over a lack of supporting local journalists. Epic Games recently started a legal battle with the company. And finally, consumers have launched an unsealed lawsuit over the cut that Google takes from applications on its store. Now, this is far too much to take in at once, so we'll take a look at the first and last lawsuits.
The reason we're paying attention to these lawsuits is because they're identical, if not the same, in nature. As it so happens, Google has a monopoly over app markets in Android devices. Considering the popularity of said devices, this is no small feat. While Google has repeatedly stressed that other options are available to the general public, most of them prove limited, impractical, or even banned in certain regions. The Google Play Store is Android's definitive stop for applications. And while the company doesn't make a habit of posting its sales figures online with a lot of pomp and grandeur, certain numbers have been un-redacted for the lawsuit.
Google apparently earned a whopping USD $11.2 billion in the year 2019, solely generated via Play Store revenue. Other than this, Google's income came from two sources: first being, gross income, with the second being operating costs. The former generated USD $8.5 billion, with the latter stands in at USD $7 billion. All of this accumulates to an operating margin of 62%. Now, with such an obscene amount of money being generated with just a functional app store, users began to take note of certain factors that Google was not being upfront about.
Apple's App Store takes 30% of an app's generated revenue. This is not something the company shies away from, despite receiving criticism for it. What would, however, be worse is if this were not made crystal clear from the get go. It seems that Google, by retracting their earnings and revenue, have tried to ensure the opposite of crystal clear. Another concern of these lawsuits is that Google is actively engaging in anti-competitive action, in order to maintain its monopoly. Information by both lawsuits has been unearthed, revealing that Google has actively offered the likes of Netflix and Riot Games incentives, along with certain restrictions, to make sure they never leave the Play Store. Such monopolization unabashedly goes against the concept of a free market.
Whatever the results of these lawsuits may be, one thing is clear: no company needs the insane amount of money that Google is generating. By reducing their cut of the earned profits, the company could cut developers indie and otherwise across the board some slack, while losing a bare minimum of their profit. Information uncovered by the lawsuits has also revealed that Google only needs 6% of all app revenue in order to break even. 30%, along with incentives to monopolized the market, is overkill.
Photo: Charles Platiau / Reuters
H/T: TV / Reuters
Read next: Here's how much Google is paying to become Apple’s default search engine
Google is swimming neck deep in quite a few lawsuits. While lawsuits are commonplace for nearly every major corporation, they don't always loom so large. A total of 37 states in the US are suing the company over antitrust violations. The government of Australia has threatened legal action over a lack of supporting local journalists. Epic Games recently started a legal battle with the company. And finally, consumers have launched an unsealed lawsuit over the cut that Google takes from applications on its store. Now, this is far too much to take in at once, so we'll take a look at the first and last lawsuits.
The reason we're paying attention to these lawsuits is because they're identical, if not the same, in nature. As it so happens, Google has a monopoly over app markets in Android devices. Considering the popularity of said devices, this is no small feat. While Google has repeatedly stressed that other options are available to the general public, most of them prove limited, impractical, or even banned in certain regions. The Google Play Store is Android's definitive stop for applications. And while the company doesn't make a habit of posting its sales figures online with a lot of pomp and grandeur, certain numbers have been un-redacted for the lawsuit.
Google apparently earned a whopping USD $11.2 billion in the year 2019, solely generated via Play Store revenue. Other than this, Google's income came from two sources: first being, gross income, with the second being operating costs. The former generated USD $8.5 billion, with the latter stands in at USD $7 billion. All of this accumulates to an operating margin of 62%. Now, with such an obscene amount of money being generated with just a functional app store, users began to take note of certain factors that Google was not being upfront about.
Apple's App Store takes 30% of an app's generated revenue. This is not something the company shies away from, despite receiving criticism for it. What would, however, be worse is if this were not made crystal clear from the get go. It seems that Google, by retracting their earnings and revenue, have tried to ensure the opposite of crystal clear. Another concern of these lawsuits is that Google is actively engaging in anti-competitive action, in order to maintain its monopoly. Information by both lawsuits has been unearthed, revealing that Google has actively offered the likes of Netflix and Riot Games incentives, along with certain restrictions, to make sure they never leave the Play Store. Such monopolization unabashedly goes against the concept of a free market.
Whatever the results of these lawsuits may be, one thing is clear: no company needs the insane amount of money that Google is generating. By reducing their cut of the earned profits, the company could cut developers indie and otherwise across the board some slack, while losing a bare minimum of their profit. Information uncovered by the lawsuits has also revealed that Google only needs 6% of all app revenue in order to break even. 30%, along with incentives to monopolized the market, is overkill.
Photo: Charles Platiau / Reuters
H/T: TV / Reuters
Read next: Here's how much Google is paying to become Apple’s default search engine
