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Decision in Apple-Epic’s fight shows need to update laws: US lawmakers

Google's Play store employs rules similar to the ones struck down in the Apple case (ET Telecom)

OAKLAND (Reuters): Android app makers suing to stop Alphabet Inc’s Google from siphoning up to 30 percent of their sales received little reassurance about their chances as a judge allowed a comparable fee charged by Apple Inc to stand.

Developers including “Fortnite” maker Epic Games in the last year took aim at the two biggest mobile app stores, run by Apple and Google. The critics view the fee as needlessly high, costing developers collectively billions of dollars a year, and a function of the two big tech companies having monopoly power.

Google’s trial is at least a year away, time both sides could use to hone arguments based on the Apple decision, legal experts said. In a ruling following a trial between Epic Games and Apple, U.S. District Judge Yvonne Gonzalez Rogers required Apple to let developers tell customers about ways to pay outside of its App Store, leading Apple shares to fall 3.3per cent. Alphabet dropped 1.9per cent.

Read more: New iPhones expected as Apple to hold event on September 14

Google’s Play store employs rules similar to the ones struck down in the Apple case, limiting developer communications with their customers, and Tom Forte, an analyst at D.A. Davidson, said Google could be at risk, too. He also noted the remaining risk of new regulatory action by lawmakers.

However, Gonzalez Rogers allowed standing requirements that developers bemoan even more. Those rules, including that in-app payments, be made on Apple’s own system, allow the company to collect its 15-30per cent fee.

Apple General Counsel Katherine Adams told reporters that her company was extremely pleased. Epic Chief Executive Tim Sweeney wrote on Twitter that, “Today’s ruling isn’t a win for developers or for consumers.”

Its 30per cent rate, she said, was set “almost by accident when it first launched the App Store” rather than as a result of market power. Google has made similar arguments of privacy and security benefits as justification for its rules and fee, and it has long followed Apple’s lead on commission levels, Google documents revealed in lawsuits show.