A regulatory filing from Google appears to have confirmed rumors in recent months that the European Union’s competition division is investigating how it operates its smartphone app store, the Play Store.
However, TechCrunch understands that no formal EU investigation into the Play Store has been opened at this stage.
SEC Form 10-Q, filed by Google’s parent company Alphabet (and spotted earlier by Reuters), mentions the initiation of “official” investigations into Google Play’s “business practices” in May 2022 – at the both by the European Commission and the United Kingdom. Competition and Markets Authority (CMA).
The fact is that the Commission’s procedure when opening a formal competition investigation is to make a public announcement – so the absence of this standard regulatory disclosure suggests that any EU investigation is at a more preliminary stage than the Google quote suggests.
The UK antitrust regulator’s investigation into Google Play is undoubtedly a formal one – having been made public by the CMA in June – when it said it would investigate Google’s rules governing app access to the Internet. listing on its Play Store, looking at the terms it sets for how users can make in-app payments for certain digital products.
While in August, Politico reported that the Commission had sent out questionnaires probing Play Store billing terms and development fees – citing two people familiar with the matter. And potentially suggesting that an investigation was underway. Although the EU executive declined to comment on its report.
A Commission spokeswoman also declined to comment when we asked about the “formal investigation” mentioned in Google’s filing (at the time of writing, Google had also not responded to requests for this). topic).
But we understand there’s no “official” EU investigation into Play yet – at least not how the EU itself understands the word.
This may be because the EU Competition Division is still assessing the responses to inquiries made so far – and/or assessing whether there are grounds for concern. .
Alternatively, he could have decided that he had no concerns about how Google operates the Play Store. Although developer complaints about app store commissions taken by Google (and Apple) – via the 30% discount typically applied to in-app purchases (a lower rate of 15% may initially apply) – have not not diminished. On the contrary, complaints have multiplied, especially following moves by tech giants to expand the types of sales that incur their tax. The absence of concern for competition here therefore seems unlikely.
Last year, the Commission also accused Apple of an antitrust violation related to the mandatory use of its in-app purchase mechanism imposed on developers of music streaming apps (in particular) and the restrictions imposed on developers preventing them from informing users of alternative and cheaper payment options.
So the app store terms and conditions are definitely on the EU radar.
More than that: the EU recently passed legislation that aims, among various proactive provisions, to regulate the fairness of app store terms. Thus, the existence of this new ex ante competition regime seems the most likely explanation why there is no formal EU investigation into Google Play today.
As regards Google, the Commission has has already taken several major antitrust actions against his company over the past five plus years – with rulings against Google Shopping, Android and AdSense; as well as an ongoing investigation into Google’s adtech stack (plus another into an advertising deal between Google and Facebook).
Another consideration here is that EU lawmakers have had a very busy year reaching consensus on a number of major elements of digital regulation – including the aforementioned ex ante competition reform (aka the law on Digital Markets; DMA) which will throw the Commission into a centralized enforcement role overseeing the so-called ‘gatekeepers’ of the internet.
This incoming regime forces the Commission to quickly create new divisions to oversee DMA compliance and enforcement – so the EU may feel a little stretched on the resource front. But – more importantly – he can also try to keep his powder dry.
Essentially, the Commission may want to see if the DMA itself can do the job of triaging complaints from app developers – since the regulations contain a number of provisions specifically aimed at app stores, including a ban for guardians to impose “general conditions, including tariff conditions”. , which would be unfair or lead to unjustified differentiation [on business users],” for example.
The regulation is expected to start applying from spring 2023, so a new competition investigation of Google’s App Store at this stage could risk duplicating or complicating the application of terms already embedded in the law. of the EU. (Although the process of designating gatekeepers and basic platform services will have to precede any application – so the real DMA action might not happen until 2024).
For its part, Google denies any antitrust wrongdoing anywhere in the world. His business practices are under investigation.
In the section of his filing summarizing antitrust investigations targeting his business, he wrote, “We believe these complaints are without merit and we will defend ourselves vigorously.”
His filing also reveals that he intends to appeal to the EU’s highest court after his bid to overturn the EU’s Android ruling was rejected last month. (The CJEU will only hear appeals on a question of law, so it remains to be seen what Google will try to argue.)
Privacy sandbox
Also today, the UK’s CMA released its second report on Google’s ongoing monitoring of commitments as it develops a new adtech stack to replace tracking cookies (aka Privacy Sandbox).
The regulator said it found Google to be compliant with commitments made so far – and listed its current priorities as: ensuring Google designs a robust testing framework for its proposed new tools and APIs; continue to engage with market players to understand the concerns they raise, challenge Google on its proposed approaches, and explore alternative designs for Privacy Sandbox tools that might address these issues; and the integration of a recently appointed independent technical expert (a company called S-RM) into the monitoring regime.
The CMA report also reveals that – along with the UK’s privacy watchdog, the ICO – it is in discussions with Google on the design of user controls for when Privacy Sandbox will reach availability. general in 2023.
So it will be interesting to see if UK regulators are enabled enough to prevent the usual manipulative design tricks from being cynically incorporated into these future advertising consent interfaces.
“Google presented its current UI proposals for topic, FLEDGE, and ad measurement controls. Together with the ICO, we are continuing the dialogue with Google about this and what drives current design decisions around the opt-in or opt-out consent flow,” the CMA notes.
“A key feature of our final Privacy Sandbox evaluation will be to assess both the privacy impacts of the technologies themselves and how they compare to their performance against development and implementation criteria, including the competition,” he continues, adding, “We are continuing to work with the ICO on approaches to measuring and assessing the impacts of Google’s changes to data privacy.
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