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posted by janrinok on Friday August 20 2021, @06:11PM   Printer-friendly
from the not-so-innovative-I-guess dept.

Google Has Been Paying Wireless Carriers Billions To Not Develop Competing App Stores:

To be clear, wireless carrier app stores have always kind of sucked. Verizon's efforts to create its own app store were shut down in 2012, after underwhelming consumers for years. At the time, the narrative was that Verizon just didn't find it worth the trouble in the face of Google domination and innovation. And while that's still largely true (wireless carriers are utterly unfamiliar with competition and therefore historically suck at innovation and adaptation), it turns out there was another reason.

Namely, that Google was paying Verizon and other major wireless companies a big chunk of money to not compete with the Android marketplace. And they were paying smartphone manufacturers to ship devices without competing app stores installed. Both nuggets were buried in a freshly unredacted copy of Epic's antitrust complaint (pdf) against Google, first spotted by Jeremy Owens:

Man, I love when the redactions come off and there are fascinating numbers underneath.

This unredacted graf shows that telcos get up to 25% of Google's app sales to keep them from developing rival app stores on the smartphones they sell and service. pic.twitter.com/Vx6p1YBU6S

This agreement to start paying wireless carriers 20-25% of app sales was occurring right around the time that Google brass was visibly starting to wimp out on consumer-centric issues like net neutrality. That involved working closely with Verizon to push the FCC toward flimsy, loophole-filled, "compromise" 2010 net neutrality rules that excluded wireless entirely. Verizon proceeded to then successfully sue the FCC to have those repealed anyway, leading to better rules in 2015 that were also dismantled a few years, later, albeit thanks to lobbying, not the courtroom.


Original Submission

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Big Three Carriers Pay $10M to Settle Claims of False “Unlimited” Advertising 46 comments

https://arstechnica.com/tech-policy/2024/05/big-three-carriers-pay-10m-to-settle-claims-of-false-unlimited-advertising/

T-Mobile, Verizon, and AT&T will pay a combined $10.2 million in a settlement with US states that alleged the carriers falsely advertised wireless plans as "unlimited" and phones as "free." The deal was announced yesterday by New York Attorney General Letitia James.

"A multistate investigation found that the companies made false claims in advertisements in New York and across the nation, including misrepresentations about 'unlimited' data plans that were in fact limited and had reduced quality and speed after a certain limit was reached by the user," the announcement said.

T-Mobile and Verizon agreed to pay $4.1 million each while AT&T agreed to pay a little over $2 million. The settlement includes AT&T subsidiary Cricket Wireless and Verizon subsidiary TracFone.
[...]
The carriers denied any illegal conduct despite agreeing to the settlement. In addition to payments to each state, the carriers agreed to changes in their advertising practices. It's unclear whether consumers will get any refunds out of the settlement, however.
[...]
The three carriers agreed that all advertisements to consumers must be "truthful, accurate and non-misleading." They also agreed to the following changes, the NY attorney general's office said:

  • "Unlimited" mobile data plans can only be marketed if there are no limits on the quantity of data allowed during a billing cycle.
  • Offers to pay for consumers to switch to a different wireless carrier must clearly disclose how much a consumer will be paid, how consumers will be paid, when consumers can expect payment, and any additional requirements consumers have to meet to get paid.
  • Offers of "free" wireless devices or services must clearly state everything a consumer must do to receive the "free" devices or services.
  • Offers to lease wireless devices must clearly state that the consumer will be entering into a lease agreement.
  • All "savings" claims must have a reasonable basis. If a wireless carrier claims that consumers will save using its services compared to another wireless carrier, the claim must be based on similar goods or services or differences must be clearly explained to the consumer.

The advertising restrictions are to be in place for five years.

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  • (Score: 2, Insightful) by Tork on Friday August 20 2021, @06:12PM

    by Tork (3914) Subscriber Badge on Friday August 20 2021, @06:12PM (#1168944)
    "The Walled Garden is bad!" ... then Google proceeds to maintain their Walled Garden.
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  • (Score: 3, Insightful) by Runaway1956 on Friday August 20 2021, @06:20PM (15 children)

    by Runaway1956 (2926) Subscriber Badge on Friday August 20 2021, @06:20PM (#1168950) Journal

    That isn't monopolistic, is it?

    • (Score: 3, Interesting) by Tork on Friday August 20 2021, @06:33PM (14 children)

      by Tork (3914) Subscriber Badge on Friday August 20 2021, @06:33PM (#1168956)
      I think you mean anti-competitive, and no. It COULD be if Google's pushing out a competitor, like if somehow this move is preventing Apple from doing business. I personally don't see it but, hey, I haven't followed the smartphone market in a while. Maybe someone better informed than me can come along and provide some details.

      Before that happens, though, I'd like to mention that the definitions of some terms are fuzzy and should be established before getting into a debate about it. "Anti-Competitive" is like the word 'censorship', it's overloaded. In some contexts it's just a simple description of an action being taken, in others it's the actual law being broken and/or enforced. One matters a good deal less than the other. It's very easy to have a perpetual debate due to this lack of nuance.
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      • (Score: 4, Interesting) by EvilSS on Friday August 20 2021, @07:02PM (2 children)

        by EvilSS (1456) Subscriber Badge on Friday August 20 2021, @07:02PM (#1168969)

        It COULD be if Google's pushing out a competitor, like if somehow this move is preventing Apple from doing business.

        This is kind of what Google did to Epic, and it's at the heart of their lawsuit with Google. Epic was negotiating with a couple of handset makers to include the Epic app store as a default out of the box app. Google found out and pressured the handset companies into abandoning the deals. Now of course they can still have an Epic app store, but being blocked from having it be a default on those handsets means users have to seek it out and install it themselves, which puts them at a competitive disadvantage against the Play store.

        Now keep in mind, I'm saying this while looking at it from Epic's point of view. I'm sure from Google's and even a consumer point of view it might not be a bad thing to not have the handset loaded up with a bunch of 3rd party stores. But from a Play store competitor PoV, it sure looks anti-competitive to have a 3rd party (to your deal with a handset maker) competing company step in and squash said deal.

        • (Score: 0) by Anonymous Coward on Friday August 20 2021, @11:25PM

          by Anonymous Coward on Friday August 20 2021, @11:25PM (#1169109)

          Shouldn't those wireless carriers also be fined for accepting Google's money?

        • (Score: 2) by helel on Saturday August 21 2021, @07:03PM

          by helel (2949) on Saturday August 21 2021, @07:03PM (#1169368)

          Really this is just a replay of the old Windows/IE approach. "If you bundle anyone else browser with the system we'll pull your license" can't be done in the same way because of the open source elements so instead it's "We'll give you a kickback not to bundle anyone else's App Store with the system." It's a better situation for the carriers but not necessarily for the customers.

      • (Score: 3, Insightful) by Anonymous Coward on Friday August 20 2021, @07:03PM (9 children)

        by Anonymous Coward on Friday August 20 2021, @07:03PM (#1168971)
        Paying potential competitors not to compete is pretty much evidence of anti-trust behaviour. Google has a monopoly on Android app stores, and is paying the telcos who sell the phones and phone service NOT to compete.

        This is especially damming considering that the telcos are in an excellent position to compete. After all, the phones are owned by their clients, not Google.

        25% is billions of dollars every quarter.

        • (Score: 2) by Tork on Friday August 20 2021, @07:09PM (4 children)

          by Tork (3914) Subscriber Badge on Friday August 20 2021, @07:09PM (#1168975)

          Google has a monopoly on Android app stores...

          'Monopoly' is another one of those overloaded terms. I am *not* taking a position on whether or not Google is a monopoly in the sense you're presenting, I'm just saying that something being proprietary is not, by itself, an anti-trust behaviour that'll get a judgement against you. Gotta get the terms straight.

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          • (Score: 1, Insightful) by Anonymous Coward on Friday August 20 2021, @08:36PM (3 children)

            by Anonymous Coward on Friday August 20 2021, @08:36PM (#1169017)
            Does Google have a de facto monopoly on Android app stores? Of course it does - almost nobody knows about jail breaking so you can sideload apps from other places.

            If Google weren't paying telcos not to put other app stores on their phones, how many would be quite happy to make money off conpeting app stores? Probably all of them.

            Google is engaging in behaviour that is both anticompetitive and monopolistic. Same as they don't allow you to remove their spyware apps by marking them as "system." Time to open up both Android and iPhone to competitors app stores. Let them compete.

            • (Score: 0) by Anonymous Coward on Friday August 20 2021, @08:58PM (2 children)

              by Anonymous Coward on Friday August 20 2021, @08:58PM (#1169023)
              > Does Google have a de facto monopoly on Android app stores?

              Does Costco have a de facto monopoly on Costco Membership Cards?
              • (Score: 1, Funny) by Anonymous Coward on Friday August 20 2021, @10:02PM

                by Anonymous Coward on Friday August 20 2021, @10:02PM (#1169056)

                Confucius say: not all seeds sprout the same fruit

              • (Score: 2) by Runaway1956 on Saturday August 21 2021, @01:30AM

                by Runaway1956 (2926) Subscriber Badge on Saturday August 21 2021, @01:30AM (#1169135) Journal

                If you can find a geographic or a demographic market controlled exclusively by Costco, you might have a point. That would more or less mean that without a Costco membership, the citizens of a city, county, or state would be unable to shop for the items found in Costco. Oh, looky, down the street! Is that a WalMart sign I see? And, up the other direction, isn't that a Dollar General? And, I believe I saw a Kroger on the way into town.

        • (Score: 2) by darkfeline on Friday August 20 2021, @07:48PM (1 child)

          by darkfeline (1030) on Friday August 20 2021, @07:48PM (#1168999) Homepage

          No it isn't. Anti competitive laws are about preventing competitors who want to compete from doing so fairly. A competitor who wants to compete can just not take Google's money. I'm not restricting someone's personal freedom by offering them money to not take advantage of their personal freedom.

          Here, take this $5 and go buy yourself some candy.

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          • (Score: 1, Interesting) by Anonymous Coward on Friday August 20 2021, @10:10PM

            by Anonymous Coward on Friday August 20 2021, @10:10PM (#1169058)

            Didn't apple try making that argument when they were doing non-poaching agreements?

        • (Score: 2) by c0lo on Friday August 20 2021, @11:26PM (1 child)

          by c0lo (156) Subscriber Badge on Friday August 20 2021, @11:26PM (#1169110) Journal

          Google has a monopoly on Android app stores

          A single counterexample is needed to show falsehood.
          https://en.wikipedia.org/wiki/Samsung_Galaxy_Store [wikipedia.org]

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          • (Score: 2) by toddestan on Saturday August 21 2021, @05:57PM

            by toddestan (4982) on Saturday August 21 2021, @05:57PM (#1169342)

            A monopoly doesn't mean there's zero competition, it just means that there's one company that dominates that market. Almost no one uses the Samsung Galaxy store, even though Samsung's phones seem to be popular.

            By your logic, Microsoft never had a monopoly in PC operating systems, since there was always OS/2, Linux, etc., or Google never has never had a monopoly in search since there was always Bing, Yahoo, etc.

      • (Score: 3, Informative) by Anonymous Coward on Friday August 20 2021, @07:29PM

        by Anonymous Coward on Friday August 20 2021, @07:29PM (#1168989)

        The excuse did not work for Microsoft once upon a time.
        "Microsoft entered into a consent decree in 1994 that barred them from conditioning the availability of Windows licenses or varying their prices based on whether OEMs distributed other operating systems.[8] "
        https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows#The_%22Windows_tax%22 [wikipedia.org]

  • (Score: 5, Interesting) by stretch611 on Saturday August 21 2021, @08:30AM

    by stretch611 (6199) on Saturday August 21 2021, @08:30AM (#1169224)

    Despite how evil it is now, I will actually defend Google on this one...

    If anyone remembers the smart phone market from literally a dozen years ago... Initially AT&T and Verizon did have their own app stores for android phones.

    I actually remember a friend of mine complaining that the map software of one of those stores cost too much and they could not download google maps which I had on my android (for free) at the time. (I was on t-mobile then which was the first major carrier to adopt android in the US due to its 4th place as a competitor.)

    In fact I also remember one of the small competitors at the time (MetroPCS) actually had a walled internet with its android phones... you could only reach the websites that metroPCS allowed.

    If it took some of Google's cash at the time to get rid of wireless carrier owned app stores, than I say, "Thank you Google!"

    In fact, I would even go a step farther and thank Apple. At the time, it forced AT&T to offer unlimited internet with no caps. (while later it added caps and performance degradation on speed, it actually got the ball rolling and competition added cheap internet as well.)

    I even suspect that the smartphone revolution caused the collapse of texting charges as well. (You were damned to a pauper's life back then if you had a teenage daughter that could text.) With the proliferation of IM apps on smartphones, it likely broke the texting cash cow.

    So, yes, I commend the initial anti-competitive behavior of the Google/Apple smartphone duopoly; It wrest a bunch of control away from the wireless carrier cartel. It made things better for the consumers.

    That being said, I do think that it is time to wrest some of that power away from Google/Apple now, but I do appreciate the past.

    --
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