Google faces major multi-state antitrust lawsuit on Google Play fees – TechCrunch

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A group of 37 attorneys general filed a second major multi-state antitrust lawsuit against Google on Wednesday, accusing the company of abusing its market power to stifle competitors and forcing consumers into in-app payments that give the company a hefty cut. .

New York Attorney General Letitia James leads the case along with attorneys general from Tennessee, North Carolina and Utah. The bipartisan coalition represents 36 states in the United States, including California, Florida, Massachusetts, New Jersey, New Hampshire, Colorado, and Washington, as well as the District of Columbia.

“Through its illegal conduct, the company has ensured that hundreds of millions of Android users are turning to Google, and Google alone, for the millions of apps they can choose to download to their phones and tablets,” James said in a statement. a press release. “Worse, Google is squeezing the lifeblood of millions of small businesses just trying to compete.”

In December, 35 states filed a separate antitrust action against Google, claiming that the company had engaged in illegal behavior to maintain a monopoly on search business. Last October, the Justice Department filed its research-focused antitrust case.

In the new lawsuit, incorporated below, the bipartisan coalition of states claims that Google uses “misleading” security advisories to keep consumers and developers within its gated app garden, the Google Play Store. But the fees that Google collects from Android app developers are probably at the heart of the case.

“Not only did Google act illegally to prevent potential rivals from competing with its Google Play Store, but it also profited from improperly blocking app developers and consumers in its payment processing system and thus charging high fees.” District of Columbia Attorney General Karl Racine said.

Like Apple, Google bundles all app payment processing into its own service, Google Play Billing, and reaping the rewards – a 30% cut of all payments. Much of the criticism here is a case that could and likely will be made against Apple, which exerts even more control over its app ecosystem. Google doesn’t have an exclusive app equivalent to iMessage that keeps users locked in the same way.

While the lawsuit discusses Google’s “monopoly power” in the app market, the elephant in the room is Google’s thriving direct competitor in the mobile software space. The lawsuit argues that consumers face pressure to get stuck in the Android ecosystem, but on the Android side at least, much of that is ultimately familiarity and sunk costs. The argument on the Apple side of the equation here is arguably much stronger.

The racket about tech giants crushing app developers with high mobile payment fees is getting louder. The new multi-state lawsuit is the latest joke, but the argument has been hot since Epic took Apple to court over its desire to bypass Apple’s fees by accepting mobile payments outside the App Store. When Epic created a workaround, Apple kicked it out of the App Store and Epic Games v. Apple.

The Justice Department is reportedly already interested in Apple’s app store practices, along with many state-owned AGs that could initiate a separate lawsuit against the company at any time.

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