States Bring a New Antitrust Suit Against Google Over Its Mobile App Store

David Paul Morris | Bloomberg | Bloomberg | Getty Images
  • A group of state attorneys general sued Google over its Play Store for Android.
  • This is the fourth antitrust lawsuit U.S. government enforcers have filed against Google in the last year.

State attorneys general are again going after Google with an antitrust lawsuit, this time alleging the company abused its power over app developers through its Play Store on Android.

The case marks the fourth antitrust lawsuit lodged against the company by U.S. government enforcers in the past year.

By focusing on the Play Store, the latest lawsuit touches on an aspect of Google's business that is most similar to Apple's. The Apple App Store has become embattled in legal challenges and drawn lawmaker questions over whether it unfairly charges developers for payments through their apps by customers and whether it favors its own apps over those of its rivals.

Attorneys general from 36 states and the District of Columbia, coming from both parties, are listed as plaintiffs in the latest case, which was filed in the Northern District of California on Wednesday. The states include California, Colorado, Iowa, Nebraska, New York and North Carolina.

The plaintiffs claim that Google has used anticompetitive tactics to extract a 30% commission from consumers, who purchase subscriptions and digital content on their Android phones. App developers, they say, have no choice but to use Google's software for distribution, in part because Google has "targeted potentially competing app stores." Meanwhile, consumers have no options because Android is the only operating system available on many handsets.

The Google Play Store distributes over 90% of Android apps in the U.S., while no other Android store has over 5% market share, according to the plaintiffs. They specifically call out Samsung, the top manufacturer of Android phones, saying that Google has tried to "buy off" the company by offering incentives to turn its Galaxy app store into a "white label" for the Play Store. Google has also thwarted past efforts by Amazon to use its own distribution store on Android.

"Google's durable monopoly power in the markets for Android app distribution and in-app purchases is not based on competition on the merits," the complaint says. "These monopolies are maintained through artificial technological and contractual conditions that Google imposes on the Android ecosystem."

In a blog post addressing the new suit, Google Senior Director of Public Policy Wilson White called it "strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others." He added that it's "similarly meritless" as a lawsuit Epic Games filed against the company that also dealt with its Play Store practices.

White said the lawsuit ignores competition the Play Store faces from Apple's App Store and that Android users can download different app stores on their devices.

Besides the latest antitrust challenge, Google faces an ongoing lawsuit from the Department of Justice and several states alleging it used exclusionary contracts to ensure default status for its apps on devices from manufacturers that used its Android mobile operating system. It also faces a lawsuit from a group of Republican attorneys general focused on its advertising technology business and alleging it entered an anticompetitive agreement with Facebook.

The third lawsuit prior to this latest challenge came from a bipartisan group of attorneys general who expanded beyond the DOJ's allegations of exclusionary contracts. The lawsuit alleged Google limits vertical search providers like Yelp and Tripadvisor from being able to reach consumers by using "discriminatory conduct on its search results page."

In the latest Android case, the plaintiffs say that one way consumers are being harmed is through a lack of innovation. Google has no incentive to offer a better service, and no other developers or app stores have channels available to reach large numbers of people.

"Instead of simply producing a better app distribution experience, Google uses anticompetitive barriers and mandates to protect its monopoly power and grow its supracompetitive revenue from the Google Play Store and Google Play Billing," the complaint says.

The plaintiffs say they are seeking "to restore competition and prevent Google from engaging in similar conduct in the future."

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