36 states and D.C. accuse Google of violating antitrust laws in new lawsuit
The number of legal challenges Google is facing continues to grow as a coalition of attorneys general from 36 states and the District of Columbia filed a lawsuit against the search giant on Wednesday alleging the company is engaged in anti-competitive behavior and monopolizing the Play Store.
Google is currently facing three other federal antitrust lawsuits, including one from the Justice Department that alleges the company's dominant search engine has allowed it to become a "monopoly gatekeeper" of the internet. But Wednesday's lawsuit is the first to challenge Google's new policy to force all app developers who want to use the Play Store to pay a 30% commission on sales. The new policy from Google will go into effect in September.
"To collect and maintain this extravagant commission, Google has employed anti-competitive tactics to diminish and disincentivize competition in Android app distribution," the lawsuit claims. It adds, "Google has not only targeted potentially competing app stores, but also has ensured that app developers themselves have no reasonable choice but to distribute their apps through the Google Play Store."
Responding to the lawsuit in a blog post, Google's senior director of public policy Wilson White argued the complaint "gets it wrong" because it limited the definition of the app marketplace to Android devices only.
"This completely ignores the competition we face from other platforms such as Apple's incredibly successful app store," White wrote. "We compete for both developers and consumers, and if we're not providing them with the best experiences on Google Play, they have other alternatives to choose from."
In the lawsuit, the states allege that the Google Play Store controls 90% of the market for Android apps and "has substantially foreclosed potential competition from alternative means to download apps, effectively eliminating consumers' choice."
White said allegations of limited choice for consumers is "not correct," adding that most Android devices are shipped with two or more app stores preloaded. "So 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," White wrote.
Google collects a 15%-30% service fee on sales of apps distributed through the Play Store and uses a Google payment system to collect the funds. The states claims that Google prevents apps distributed through the Play Store from using, directing consumers to, or even informing consumers about alternative payment options that may provide lower prices.
"This illegal tie gives Google an additional monopoly in the market for Android in-app payment processing for digital products," the complaint alleges.
Last year when Epic Games, the creator of the popular video game Fortnite, introduced a direct payment system for customers that wanted to make in-game purchases, Google booted the game from the Play Store. Apple also kicked Fortnite off its App Store and Epic filed suit against both companies.
Google has dismissed the new lawsuit from the states as meritless, claiming it mimics the complaint filed by Epic Games, and ignores that app developers can distribute their products outside of Google Play.
"The complaint suggests that Google Play somehow inhibits developers' ability to grow," White wrote. "This lawsuit isn't about helping the little guy or protecting consumers. It's about boosting a handful of major app developers who want the benefits of Google Play without paying for it."
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