State AG Alleges Google Has Monopoly With Android App Store – Antitrust / Competition Law

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United States: State AG alleges Google monopoly with Android App Store

July 13, 2021

Winston & Strawn LLP

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On July 7, 37 attorneys general from various states and the District of Columbia filed a lawsuit against Google in the Northern District of California, alleging antitrust violations related to the Google Play Store. The complaint alleges that Google maintains illegal monopolies in the markets for the distribution of applications and the processing of payments integrated on the Android operating system.

According to the complaint, Google “distributes over 90% of all Android apps in the United States” and requires app developers to use Google Play billing for all in-app digital purchases made by consumers. (Compl. 10, 11.) Google takes up to 30% of the revenue generated by the app and purchases through the app. The complaint also claims that Google has instituted rules and policies to maintain its monopoly power in both markets. The claimant states allege seven causes of action for violations of Sections 1 and 2 of the Sherman Act, and an eighth cause of action for state-specific claims. States are seeking treble damages, restitution, civil penalties and injunctive relief related to Google’s rules and policies regarding the Google Play Store.

Google’s senior director of public policy, Wilson White, released a response to the lawsuit challenging the definition of the market and specifically noting competition from Apple. He noted that manufacturers can pre-install other app stores on mobile devices, and consumers can download apps directly from developers’ websites. He also noted the help Google provides to developers and the resulting benefits for job growth in the United States. White conceded that “the scrutiny is appropriate” and said Google is “determined to engage with regulators,” but he presented the lawsuit as “stimulating a handful of big app developers who want to take advantage of the benefits of Google Play without paying for it ”.

This lawsuit is the latest example of growing antitrust scrutiny in digital markets following Epic Games Inc.’s lawsuits against Apple and Google last summer, and civil class actions brought against tech giants for alleged monopoly practices. . While states have taken the lead, Congress is also investigating antitrust issues with Google and Apple’s app stores. The Senate subcommittee on competition policy, antitrust and consumer rights held an app store hearing in April 2021, focusing on many of the same concerns raised in the complaint. Apple and Google have been especially hard pressed on the high commission rate for in-app purchases and their conduct to prevent developers from bypassing the Apple and Google billing platforms.

Across the Atlantic, the European Commission has accused Apple of antitrust violations related to Apple’s App Store rules. And in Australia, the Australian Competition and Consumer Commission has also signaled plans to address antitrust issues related to Apple and Google app stores.

CARRY

This multi-state enforcement action is another example of the scrutiny and increasing attacks by governments on so-called “walled gardens” or closed platforms. This structure, common in software systems and digital ecosystems, typically involves a service provider exercising control over the applications, content, and / or media that are allowed to operate within the system, and restricts convenient access to them. unapproved candidates or content. Although the government’s scrutiny has recently focused on Apple and Google, all companies that operate such systems, or those that provide their services or content within similar structures, should be aware of their transactions and their impact. on the competitive landscape in the field concerned. market.

The case is the State of Utah et al. v. Google LLC et al., Case Number 3: 21-cv-05227-JSC, in the United States District Court for the Northern District of California.

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