Attorneys general from 36 states and Washington D.C. filed an antitrust complaint on Wednesday against Google, accusing the company of operating its app store as a monopoly. This lawsuit was filed ahead of a policy change later this year that would force developers on the Google Play Store to pay a commission from 15% to 30% for in-app purchases.

Here’s an example: Right now if I create an app and put it on the Play Store, I have two options.

Option 1: I can use Google’s in-app payment system, and then Google takes a 15% commission until I make $1 million in revenue, and then it takes 30%.

Option 2: I could have people who use my app enter their credit card information directly to my payment processor, like PayPal. In this case, Google wouldn’t get a commission, even though I’m distributing my app through its platform.

Google announced last year that it was getting rid of that second option by September 2021, and would then make all apps go through its own in-app payment system. This ensures that Google gets a cut of whatever apps sell on its platform, with the downside of now capturing the interest of antitrust regulators.

In the antitrust complaint, state regulators call out Android’s dominance in the smartphone operating system market, as it’s the only real option for any hardware company that wants to make a phone and license the operating system. They claim Google holds 99% market share of the licensable mobile operating system market, and that the Android Play Store has no real competition either, as it distributes 90% of Android apps in the US.

So while Google claims it’s an open system, regulators claim there are no actual competitors.

And when companies like Samsung or Amazon try to develop their own app store on the Android platform, Google either cuts a deal with that company to stop it or otherwise discourages the creation of the marketplace through its own product decisions, the complaint said.

Here’s another important factor: Regulators make the case that Apple’s App Store isn’t a true competitor to Google’s Play Store, because app developers can’t easily upload the same app to both stores, and consumers need different expensive devices to access each.

Convincing the court of this idea, that Google’s Play Store doesn’t compete with the only other massive app store in the United States, will be crucial to proving that the Play Store is a monopoly.

Google, of course, has denied all of this in a press release.

Apple found itself in similar trouble last year, and both companies are facing a similar lawsuit levied by Fortnite developer Epic Games. To dodge criticisms of its 30% commission crippling smaller developers, Apple started charging 15% until a developers’ first $1 million in revenue, which Google then later adopted.

Apple’s case is slightly different, however, since it has never claimed to be an open ecosystem for competing app stores, and doesn’t license its iOS operating system.

The case will be heard by federal Judge James Donato, according to Politico, who is also presiding over Epic Games’ trial against Google, scheduled to start in April 2022.

Dave Gershgorn

NEWSWORTHY

Sing for your supper on TikTok. A month-long pilot program on TikTok lets users submit a video resume to more than 30 participating companies, including Target, Chipotle, and the Detroit Pistons basketball team’s corporate office. Many of the listings are for content creation or social media management roles, which helps creators find a steady gig, and installs die-hard TikTok users in strategic roles across different industries.

Robinhood expects to pay up. The cryptocurrency arm of Robinhood, the popular app for retail investors, revealed in a public filing that it expects to pay fines of more than $10 million for violating New York laws on cybersecurity and failing to implement anti-money laundering features, The Wall Street Journal reports. The fine could range past $15 million, the company said, and would likely include hiring a firm for independent oversight of future schemes.

A PrintNightmare scenario. Microsoft is warning users to update their Windows 10 operating systems after an exploit called PrintNightmare was discovered by security researchers. The vulnerability lies in a small program called PrintSpooler, which lets multiple people use the same printer. The exploit gives nearly unfettered access, including the ability to install programs and create new users, CNN reports.

Tencent helps China’s gaming crackdown. Chinese game maker Tencent says it will use facial recognition to comply with a 2019 law banning excessive gaming for minors, according to Gizmodo. The draconian law prohibits minors from playing video games during most hours of the night, and limits daily play time to 90 minutes. The facial recognition tech will scan all gamers’ faces and check whether they’re a minor against a central database.

FOOD FOR THOUGHT

Autonomous warfighters are already here. Killer robots might seem like a topic from a far-flung future, but they’re already in use across the world, The Washington Post reports. Drones are especially becoming popular as autonomous weapons, since they can be easily outfitted with explosives and scanners that search for enemy radar signals to find targets.

From the piece:

Picture a desert battlefield, scarred by years of warfare. A retreating army scrambles to escape as its enemy advances. Dozens of small drones, indistinguishable from the quadcopters used by hobbyists and filmmakers, come buzzing down from the sky, using cameras to scan the terrain and onboard computers to decide on their own what looks like a target. Suddenly they begin divebombing trucks and individual soldiers, exploding on contact and causing even more panic and confusion.

IN CASE YOU MISSED IT

House Speaker Nancy Pelosi’s husband cashed in on Big Tech just as Congress was set to pounce by Sophie Mellor

Beijing might finally close the IPO loophole that allowed Didi to list overseas by Eamon Barrett

Everything to know about REvil, the group behind a big ransomware spree by Jonathan Vanian

Donald Trump sues Facebook, Twitter, and Google—but legal experts say it’s just for attention by Nicole Goodkind

Messaging app Telegram has become a haven for crypto fraud discussions by Jessica Mathews

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BEFORE YOU GO

A medical study using FitBit devices may give clues into the lasting effects of Covid-19. Study participants who had the virus still suffered from higher resting heart rates, worse sleep, and lower overall step counts during the day weeks after the brunt of the illness, according to The New York Times. This experiment's cohort is small, at just 234 people who tested positive, and scientists worldwide are still disentangling the lasting effects of the virus. But this early data shows how consumer devices like smartwatches could help us understand public health.