Dozens of US States sue Google over Play Store practices

Dozens of US States sue Google over Play Store practices

Dozens of states have filed an antitrust lawsuit against Google that focuses on its app store practices

The lawsuit alleges that Google abused its dominance in the mobile ecosystem to favor its own Google Play Store, reducing competition in the process. The lawsuit also points to the fees Google charges developers for in-app purchases.

Bloomberg was the first to report the lawsuit.

Court records reviewed by Citizen Free Press Business on Wednesday showed that the case against Google has been opened in the US District Court for the Northern District of California. The District of Columbia and 36 states are named as participants, including New York, California, Colorado, Utah, Massachusetts and others.

According to Wednesday’s lawsuit, Google has a monopoly on the distribution of Android apps in the United States and has used restrictive contracts to force Android device makers to promote the Google Play Store at the expense of competition.

(Similar accusations in Europe prompted Google to announce in 2018 that it would stop bundling must-have apps like Google Maps and Gmail with the Play Store.)

Part of Google’s purported goal was to hamper the rise of third-party app stores. According to the lawsuit, Google made “a direct attempt to pay Samsung to exit relationships with major developers” so that Google’s app store would remain the most attractive source of Android apps.

The lawsuit also questions Google developers’ conditions that “make Google Play Billing the only in-app payment processor that an Android developer can use” when an app sells digital content through an Android app.

This is similar to the allegations leveled at Apple in the Epic Games case.

“Google is using its dominant position in the marketplace to stifle competition and extract billions of dollars in commissions on in-app purchases from unsuspecting consumers, and this anti-competitive behavior must end,” said the attorney general for the District of Columbia, Karl Racine, in a statement.

“Google has not only acted illegally to block potential rivals of the competition with its Google Play Store, but it has profited by improperly locking application developers and consumers into its own payment processing system and then charge high commissions.”

Google responded to the lawsuit in a blog post, saying that “it is strange that a group of state attorneys general has decided to file a lawsuit that attacks a system that offers more openness and choice than others.”

The allegations represent the latest legal headache for Google, which already faces multiple antitrust lawsuits from the federal government and states. They also reflect growing criticism from app developers and regulators, who increasingly scrutinize the Google and Apple app stores in the mobile technology arena.

The news of the lawsuit has been received with some joy. For example, the Coalition for App Fairness, an industry nonprofit whose members include Spotify, Tile and Match Group, said it supported the lawsuit.

“App stores have had a free hand to abuse their dominant position in the market for too long,” the group said. “Their anti-competitive policies stifle innovation, inhibit consumer freedom, inflate costs, and limit transparent communication between developers and their customers.”

This spring, Apple and Epic Games faced off in a bench trial over whether Apple has a monopoly on the sale of iOS apps and has abused its power against app makers.

Epic, the creator of the online video game “Fortnite,” had tried to circumvent the Apple-owned in-app payment system that allows the iPhone maker to take 30% of digital goods and services sold on iOS.

That led to a contract dispute that caused Apple to remove Fortnite from its app store, ultimately leading to the lawsuit from Epic, which could disrupt Apple’s business model.

Apple argued in the lawsuit that it competes vigorously to distribute video game applications, including Fortnite. A decision on the case is expected in the coming months.

Ben Oakley
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