Governments Limit the Power of Google and Apple

13 September 2021
Reading: 5 min

The market monopoly of big corporations can be seen globally, yet only recently have we become witnesses to multiple legal actions taken by governments all over the world to ensure more justice in this industry. Here are some of the countries that take control over the tech market to heart.

The United States

Governments Limit the Power of Google and Apple

In autumn 2020 and then again exactly a year later, Google faces a big lawsuit from the US government, which is threatening to become a pivotal precedent in the “state vs business” relationship. The main argument is that Google has monopolized the US search market and is using different tools including puppet companies to bar entry into the market for the competition. Additionally, it is not seen as a positive move that Google’s search engine is pre-installed and operates as a default feature for many popular smartphones, including Samsung and iPhone. The latter is especially damning for the big G in this lawsuit, as the company pays Apple about $10 bn annually for this default deal. From a legal standpoint, Google faces two antitrust suits from the Department of Justice. The corporation is in total denial and claims that the overwhelming presence of Google services on the market is due to their natural popularity among users.

South Korea

In August 2021 South Korea passed a bill to limit the power of Google Play and App Store as the dominant application distributors. Now the developers will have the freedom to choose in-app billing systems other than those provided by said companies. This move is rather important both for application developers and marketers, as the companies used to take a hefty fee (up to 30%) for providing billing services. In addition to this bill, Apple and Google are forbidden from unlisting the apps whose developers opt for a different billing provider. This measure was deemed necessary to protect the users and developers from a possible backlash. And it was well justified, only last year Fortnite was unlisted from All Store because the developer Epic Games added a third-party billing system in the game. For the moment, the only response from our tech giants was that such a motion may undermine the security of user in-app transactions and will result in a sharp decrease in purchases.


Governments Limit the Power of Google and Apple

Google and Apple are the main providers of all mobile software in Japan, and this is the cause for the Japanese Fair Trade Commission (JFTC) to limit their hold over the market. In their opinion, such a monopoly undermines the potential for growth, change, and development in the tech industry. JFTC had Apple under investigation over permitting “reader” app developers to share a link to an external website within a listed application. Now Japan is also investigating the predominance of these two companies on the market to check that tech device and services providers have not been threatened into pre-installing Apple/Google software. In general, the Japanese government also strives to provide greater transparency in the digital sector.


The same issue with App Store and Google Play payment services is now in discussion in Russia. The Federal Antimonopoly Service (FAS) has issued a warning that users must be notified of alternative ways of purchase. Allegedly, this was a grassroots initiative coming from the users complaining that many products are overpriced (15% to 30%) with app stores compared to the developer’s website store. In this instance, Apple has conceded, and now sellers can receive direct payments bypassing the distributor’s fee.

A completely different struggle is that against applications uploaded to these app stores by Russian opposition activists. The censorship agency, Roskomnadzor, demands the “illegitimate, unauthorized, anti-constitutional” apps to be deleted immediately as they may undermine social stability on the eve of the elections. Google is not responding to these claims, while Apple simply asked the app developers to resolve the matter between them and the government.


Governments Limit the Power of Google and Apple

Seeing that Apple and Google are not the only giants on the market, China decided to crack down on their gaming and shopping tech companies. Tencent and Alibaba are on the line at the moment. Both now have extensive “social responsibilities packages” donating billions for national prosperity. Regarding the gaming industry, Chinese minors will be limited to 1 hour of online gaming daily in order to improve their mental and physical health. Tencent and other big gaming companies have prompted an announcement that underage users constitute only a minor share of their clientele and, consequently, revenues.

The noticeable move towards more independence when it comes to in-app purchases is the most important piece of news for marketers. This means that developers and direct advertisers will not have to pay the usual fee. But it is still early to say that this promising development will not be outweighed in the nearest future, as Google and Apple are rather experienced when it comes to leveraging budgets and growing their revenues at all costs.

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