Jul 21, 2021
Google's Being Sued by the States -- And it doesn't look good for them Craig Peterson: We talked earlier about Amazon and how much trouble they're in right now, Google apparently is in a similar boat. We had just this week, dozens of state attorneys, general suing Google on antitrust grounds.
[00:00:16] You can reach me online. Just me. M E Craig peterson.com or what most people do is they just hit reply to my newsletter.
[00:00:25] Hopefully you're on my newsletter, right? That goes out every week. If you're on that newsletter you can just hit reply and ask me questions. Any questions you want? I'm more than glad to answer them. I know most of you guys, you're not business people. I am still glad to answer your questions for you to keep you on the right track.
[00:00:42] The whole idea here is it's to keep you going. Safer. And if you're a business person, what the heck, maybe I can help you out as well while the here is a problem. And it's a very big problem. We have these absolutely huge companies that are using their market position in order to really control the entire world.
[00:01:09] Now it's a very big problem because you have companies that are sitting on billions of dollars in cash who can and do keep their competition out of the market. Now, one of the ways that keep them out, and I've mentioned this before, Microsoft has done this multiple times as lost lawsuits about it, particularly over in Europe, but they find somebody who might be a competitor and they basically squeeze them out of them.
[00:01:39] Even though they're not necessarily even a direct competitor. One of the things Facebook does is they buy companies for 10, a hundred times sometimes more. Then they're actually worth, would you take 50 million for your company? That's worth 50 million? You might not.
[00:01:56] Would you take 500 million for the company? How about a billion dollars? That's where it starts becoming very questionable about what they're doing. One of the things that Google is allegedly doing right now is preemptively squashing com competing app stores. When you look at Google and the Google Android ecosystem, who sells the most Android devices out there, right?
[00:02:24] The high-end devices, the number one seller of Android phones is of course, Sam. And Samsung started to put a store too. An app store. So you could buy Samsung, Sam sung apps now, apple and Google, both charge about the same rates as a general rule. It's 30% for these bigger companies that they have to pay the app store, okay. I'm okay with that. They both spent the time to build the platform, to monitor it, to try and keep the app store clean and guides. That's definitely worth something. But what if Samsung came along and said, okay, we're only going to charge 10% royalty. In our app store and the apps will run on all of our Samsung Android phones.
[00:03:13] So it's still using the Google operating system. It's still Android. It will probably run on other than Samsung phones as well. That's the whole nature of, but that hasn't happened. And why hasn't it happened? These state attorneys general are saying that what has happened is the Samsung galaxy store got squashed by Google.
[00:03:41] So it could maintain its monopoly on Android app distribution. So it says that Google engaged in a bunch of different anti-competitive practices. They offered large app developers, profit share, and agree. In exchange for exclusive exclusivity. Okay. I can see that the apple iPhone came out. Do you remember this exclusively on ATN T's network?
[00:04:08] Is that a problem? They're saying also the Google created unnecessary hurdles for what's called sideloading. So sideloading is where you might go to another app store in order to install something. Or maybe it's something that you want to put on your site. It's not fully approved by the Google play store.
[00:04:29] So that's the basics of what the side loaning is all about. So saying that they made that even harder. Okay. From Google standpoint, do we really want to. Allow anything to run on our phones. And here's the question, here's why, right? What do I do for living cyber security? What is one of the things you have to do for cybersecurity?
[00:04:51]You've got to put in special routers, special firewalls and software on servers and computers. Whoever touches a computer last owns the next problem. That's been my mantra forever. So if we installed some software on a computer or we had the customer installed some software on a computer, and there's a problem who they get.
[00:05:14] They're going to call me, right? Because I was the last one to touch their computer. And at that point now I have to show, okay, it wasn't me. It was this other piece of software. QuickBooks is a piece of junk, you know what, whatever it is, I'm going to have to justify it. And frankly, I'm probably going to have to fix it.
[00:05:33] So Google is saying. We don't want all of these app stores that might have apps that are not secure apps, that crash apps that might cause problems with the Android ecosystem. I think that's perfectly legitimate. Apparently these state attorneys general don't think it is. And here's the last one. This is a.
[00:05:56] Attempting to buy off Samsung to limit competition from the Samsung galaxy app store. Now, Google is saying that this lawsuit is merit lesson. I can see a whole bunch of legitimate argument on their part. They also said, quote, and this is an article from ARS Technica. It's a strange, it's strange that a group of state attorneys general.
[00:06:21] Chose to file a lawsuit, attacking a system that provides more openness and choice than the others. In other words, are taking a jab at apple because apple is very closed for the reasons I just decided to hear that Google I'm sure is going to argue as to why they are closed. Okay. Apparently the state attorneys general are saying, quote, Google promised repeatedly that Android would be the basis for an open ecosystem in which industry participants could freely compete.
[00:06:56] Google has not kept its word. Instead. Google has taken steps to close the ecosystem from competition and insert itself as the middleman between app developers. Consumers. Okay. Can, so can you see that they're also complaining this 30% commission. It's a monopoly rent that unfairly burdens consumers and developers, and K-12, you could argue that I don't fall for that one personally.
[00:07:24] Now the buy-off is where I think that there's a lot. Yep. Teeth in this particular lawsuit. Cause they're saying that we've got the commission rate argument, right? We've got those. It's not as open as you said, it would be. But these attorneys general have spent a lot of time dissecting Google's alleged efforts to keep competing app stores at bay by, and they said Google was willing to offer Samsung myriad benefits and concessions in order to prevent Samsung's galaxy store from being built out.
[00:08:00]Again, Is that a huge problem. If you've got a big customer or a potential partner coming to you and saying, okay, I want a few concessions here. I'm not going to pay 30%, or I want to have some of you, my developers in house with your people so that they can short circuit some of the problems that always develop those are.
[00:08:25] In the business in business period. And when it comes to software development, right? People, businesses have we'll use apple again as an example jam, which is a really great set of software to help manage your devices. Jan PF, you might want to check it out. So jam had their engineers camp out at Apple's headquarters, apparently four months while they were working on.
[00:08:52] Some of the, their software for the next release of Apple's iOS and Mac iOS. Is that unfair? Yeah, in a way it is right because here I am little Mr. Small developer and I'm not gaining access to Apple's top engineers and able to send mine out there to live with apple engineers and ask questions and help them debug my software.
[00:09:18] But it happens every day. Makes sense. So it says though the galaxy store was not nearly as popular as the play store. Google feared that Samsung would develop into a strong competitor, especially since the company sells a majority of high-end Android phones in the us ARS Technica says Google was particularly concerned that Samsung would get an exclusive game.
[00:09:43] For the store to attract more users, which Samsung did do in 2018, when it partnered with epic to launch fortnight exclusively on the galaxy store. And that one, move that one game. That one app. Costs Google millions of dollars in revenue. So we'll see what happens here. They make other claims in there. Apparently it even offered a Google offered to white label, the play stores, the galaxy store, so that Samsung could maintain its branding, all kinds of negotiations, the types of things I've seen before, the types of things that are.
[00:10:23] Particularly uncommon, but a European commission is also going after them with an antitrust investigation. They've done that a few years ago with this is a problem. These companies are huge and we don't let them fail. Look at what happened. GM and Chrysler, both got bail and the federal government Chrysler got bailouts twice.
[00:10:45] The free market. You never would have had that happen. The best part of Chrysler would still exist and those weak parts would have been gone. That's what bankruptcy law is all about GM. The same thing, the best parts of GM would have remained. We would have probably had better cars today. Then we have, if DM GM had been allowed to go bankrupt and yeah, it's going to hurt people, but guess what?
[00:11:11] It's hurting people right now from the other side. And when I see this happening as well at Google and Amazon, of course they haven't gone bankrupt, but they both along with Facebook and a few others, they're both huge. Huge and they control so much of the market. So what's the best way forward. What do you think I'd love to hear from you?
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