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Dozens of states are suing Google over app store practices

bynewsdesk
July 8, 2021

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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 suit also focuses on the fees that google (GOOGL) charges developers for in-app purchases.

Court files reviewed by CNN Business on Wednesday show the case against Google has been opened in the U.S. 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 complaint, Google has a monopoly on the distribution of Android apps in the United States and has used restrictive contracts to force Android device manufacturers 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 like Google Maps and Gmail with the Play Store.)

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 end 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 an Android developer is allowed to use” when an app sells digital content through an Android app.

That’s similar to the allegations against Apple in the Epic Games case.

“Google is using its market dominance to stifle competition and get billions of dollars in commissions on in-app purchases from unsuspecting consumers and must stop this anticompetitive behavior,” said District of Columbia Attorney General Karl Racine, in a statement. “Google has not only acted unlawfully to prevent 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.”

Google responded to the lawsuit in a blog post, saying, “It’s odd that a group of state attorneys general chose to sue a system that offers more openness and choice than others.”
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The allegations mark the latest legal headache for Google, which has already gone through multiple antitrust lawsuits by the federal government and the states. They also reflect increasing criticism from app developers and regulators who have increasingly scrutinized Google and Apple’s mobile technology app stores.
The news of the lawsuit was met with cheers. For example the App Fairness Coalition a non-profit trade association whose members are Spotify, Tile and Match Group said it supports the lawsuit.

“App stores have been given a free pass for far too long to abuse their dominant market position,” the group said. “Their anti-competitive policies stifle innovation, curb consumer freedom, drive up costs and limit transparent communication between developers and their customers.”

In the spring, Apple and Epic Games faced each other in a non-jury trial over whether Apple has a monopoly on iOS app sales and has abused its power against app makers. Epic, the creator of the online video game “Fortnite,” had attempted to circumvent Apple’s own in-app payment system that allows the iPhone maker to get a 30% discount on digital goods and services sold on iOS. That led to a contractual dispute that led to apple (AAPL)to remove Fortnite from its app store, which ultimately led to Epic’s lawsuit, which could disrupt Apple’s business model.

Apple argued during the trial that it competes vigorously to distribute video game apps, including Fortnite. A ruling in the case is expected in the coming months.

Sources

1/ https://Google.com/

2/ https://www.cnn.com/2021/07/07/tech/google-app-store-lawsuit/index.html

The mention sources can contact us to remove/changing this article

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