Every week, it seems, there is a new effort to break up “Big Tech.” From the halls of Congress to talking heads on TV to our own backyard, everyone seems concerned with the size and practices of companies like Facebook, Google, Apple and Amazon.
And now, Utah is co-leading a group of 36 states and the District of Columbia in an attempt to take these companies to task. This not only marks the third lawsuit that Utah has joined to take on Big Tech. This time, Attorney General Sean Reyes is suing Google, claiming it has a monopoly in its Google Play store and using that monopoly to charge excessive fees and commissions.
The headlines sound good and, on its surface, the lawsuit seems laudable: Reyes is taking on titans of the tech industry to save typical Utahns “hundreds if not thousands of dollars” they’ve overpaid in in-app purchases.
Dig a little deeper, however, and there is little to cheer for in this case.
Is Google a monopoly? A quick tally of Google Play’s competitors would suggest no. From Apple’s App Store to Samsung’s Galaxy Apps to Sony’s Apps to Amazon’s Appstore, Google’s Play store faces stiff competition from some of the other largest tech companies today. And, if the FTC’s recent case against Facebook is any indication, Reyes will have difficulty convincing a judge that Google is a monopoly just because it is big.
As the court noted in dismissing the FTC’s case, “[the FTC’s] allegations — which do not even provide an estimated actual figure or range for Facebook’s market share at any point over the past ten years — ultimately fall short of plausibly establishing that Facebook holds market power.”
The current case against Google suffers from the same shortcoming.
What’s more, it is impossible to claim Google’s Play store creates monopoly power when Google allows users to load any apps on their phone without ever needing to use the company’s app store to do so. How can Google be a gatekeeper, dictating the terms of how app developers reach consumers, when the company does not even have a gate?
Although users can download an app from anywhere, the question remains why they almost universally choose the Play store. The short answer is that Play store serves an important role in offering consumers access to a wide array of apps and tools, allowing them to make the most of technology in their daily lives. Consumers benefit because there is an easy and accessible place to find relevant apps, rather than having all the apps scattered across the web for users to track down on their own. And app developers benefit by having a direct link to consumers in the form of a one-stop-shop for apps competing for users.
While it is unpopular to say it these days, Google’s Play store exemplifies the competitive, diverse and evolving tech marketplaces that enhance consumer choice and benefit small startups. Punishing Google for creating a product that consumers are overwhelmingly choosing in a highly competitive marketplace would do little to serve them.
Over the past several years, Utah has made a name for itself as a tech hub, bringing in talented professionals, tech companies of all sizes and high-paying careers that benefit our economy as a whole. And while lawsuits like this make for good politics, they do little to improve the ecosystem.
America’s antitrust laws have been an essential tool in promoting competition and consumer welfare, but have worked best when grounded in hard facts, evidence and an understanding of how practices may benefit or harm consumers.
In the end, given the flimsy nature of the claims made in this latest lawsuit, this newest effort against Big Tech misses the mark.
Chris Koopman
Chris Koopman is the executive director at the Center for Growth and Opportunity at Utah State University.