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36 states take legal aim at Google, argue its Play Store practices violate antitrust law

Attorneys general from 36 states have filed a lawsuit against Google, accusing the company of antitrust behavior through its dealings with Android devices and its own Google Play Store.

Alissa McAloon, Publisher

July 8, 2021

4 Min Read

Attorneys general from 36 states have filed a lawsuit against Google, accusing the company of antitrust behavior through its dealings with Android devices and its own Google Play Store.

A lawsuit filed by the group this week (readable here via The Washington Post) argues that, despite its promises to keep Android an open platform, Google has created a monopoly for Android app distribution and payment processing on Android.

It's yet another lawsuit that takes issue with the fees mobile platform holders charge developers, an issue that other lawsuits like Epic's highly visible battle with Apple or recent fee structure changes on both Google and Apple app stores have dragged even further into the spotlight this year.

"Google has taken steps to close the ecosystem from competition and insert itself as the middleman between app developers and consumers," reads the lawsuit. It goes on to argue that Google collects an "extravagant commission" of 30 percent from all Google Play Store purchases and that the company employs "anticompetitive tactics to diminish and disincentivize completion in Android app distribution."

"Google has not only targeted potentially competing app stores, but also ensured that app developers themselves have no reasonable choice but to distribute apps through the Google Play Store," continues the lawsuit.

Unlike Apple and iOS, Google allows other app stores to launch on the platform, but as both this lawsuit and earlier accusations from Epic Games argue, those third-party app stores face an uphill battle on the platform thanks to Google-added barriers that discourage consumers from stepping outside of the Google Play Store. According to the lawsuit, those practices are why Google distributes 90 percent of all Android apps while "no competing Android app store has more than 5 percent of the market."

From a hardware perspective, the lawsuit also argues that the Google-owned Android operating system is, for mobile device manufacturers outside of Apple, the only viable OS available to license for use on their hardware, so much so that the lawsuit says Google controls 99 percent of that particular corner of the smartphone market. This, it continues, gives Google "durable monopoly power" and "considerable leverage" over both mobile device manufacturers as well as app developers.

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

Google, however, argues the lawsuit is "meritless"

Google fired back with a blog post shortly after the lawsuit first saw the light of day. It argues that the lawsuit "ignores choice on Android and Google Play" and "mimics a similarly meritless lawsuit filed by the large app developer Epic Games."

"We understand that scrutiny is appropriate, and we’re committed to engaging with regulators. But Android and Google Play provide openness and choice that other platforms simply don’t. This lawsuit isn’t about helping the little guy or protecting consumers," reads that post from Google senior public policy director Wilson White.

"It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it. Doing so risks raising costs for small developers, impeding their ability to innovate and compete, and making apps across the Android ecosystem less secure for consumers."

Google argues that the lawsuit ignores the fact that the Google Play Store faces heavy competition in the larger mobile space from Apple and its App Store, and that its own competition on Android is entirely fair as developers and consumers "have other alternatives to choose from" if Google Play doesn't meet their needs.

It notes that certain hardware partnerships see Android devices ship with additional app stores beyond just Google's option, like the Galaxy Store on Samsung devices or the Amazon App Store on Amazon's Fire devices. The option to sideload other app stores is mentioned as a plus here, but Google doesn't comment on the lawsuit's point that Google "makes the sideloading process unnecessarily cumbersome and impracticable" by including "discouraging security warnings" in the sideloading process. (That particular pain point was also key in Epic Games' complaints against Google last year.)

Google counters the lawsuit's allegations of its practices hurting developers by pointing to its recent fee reductions and other interesting data showing how apps monetize on Google Play. Those figures include mention that 3 percent of developers that sell either premium apps or in-app content qualify for its platform fee reduction, that 97 percent of developers on the Google Play Store don't sell digital content at all, and that less than 0.1 percent of overall app developers are actually paying the full 30 percent fee.

"This lawsuit is essentially on behalf of that 0.1 percent of developers," argues Google.

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