According to Wednesday’s complaint, Google holds a monopoly on Android app distribution 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 allegations in Europe prompted Google to announce in 2018 that it would stop bundling must-have apps such as Google Maps and Gmail with the Play Store.)
An antitrust lawsuit against Google that specifically targets its app store policies has been filed by dozens of states. In the lawsuit, it is alleged that Google reduced competition by abusing its power in the mobile ecosystem to favour its own Google Play Store. The lawsuit also criticises Google’s (GOOGL) in-app purchase prices for developers. The case was first reported by Bloomberg. The US District Court for the Northern District of California has opened a case against Google, according to court documents examined by CNN Business on Wednesday. A total of 36 states, including New York, California, Colorado, Utah, Massachusetts, and the District of Columbia, are listed as participants.
competition and extract billions of dollars in commissions on in-app purchases from unsuspecting consumers—and this anticompetitive behavior must stop,” District of Columbia Attorney General Karl Racine said in a statement. “Not only has Google acted unlawfully to block potential rivals from competing with its Google Play Store, it has profited by improperly locking app developers and consumers into its own payment processing system and then charging high fees.”
Part of Google’s alleged objective was to deter the rise of third-party app stores. According to the complaint, Google made “a direct attempt to pay Samsung to abandon relationships with top developers” so that Google’s app store would remain the most attractive source of Android apps. The complaint also challenges Google’s developer terms that “make Google Play Billing the only in-app payment processor that an Android developer may use” when an app sells digital content through an Android app.
News of the lawsuit was met with some cheers. For instance, the Coalition for App Fairness — a nonprofit industry organization whose members include Spotify, Tile and Match Group — said it supports the lawsuit. “App stores have been given a free pass to abuse their dominant market position for far 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.”
Google responded to the lawsuit in a blog post, saying “it’s strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others.” Amazon and Google are being investigated for failing to remove fake product reviews. Amazon and Google are being investigated for failing to remove fake product reviews The allegations mark the latest legal headache for Google, which is already facing multiple antitrust suits by the federal government and the states. They also reflect rising criticism by app developers and regulators who have increasingly scrutinized Google’s and Apple’s app stores in the mobile technology space.
In the spring, Apple and Epic Games faced off in a non-jury trial over whether Apple holds a monopoly on iOS app sales and has abused its power against app makers. Epic, the maker of the online video game “Fortnite,” had sought to circumvent Apple’s proprietary in-app payment system that allows the iPhone maker to take a 30% cut of digital goods and services sold on iOS. That led to a contractual dispute that prompted Apple (AAPL)to remove Fortnite from its app store, ultimately leading to Epic’s lawsuit, which could disrupt Apple’s business model. Apple argued at trial that it competes vigorously to distribute video game apps, including Fortnite. A decision in the case is expected in the coming months.