Google 'unlawfully' preserves Play Store monopoly, US States file a lawsuit

On July 7, Thirty-seven US state and district attorneys general sued Google alleging that it bought off competitors and used restrictive contracts to unlawfully maintain a monopoly for its play store on Android phones.

The allegations stem from an investigation that began in September 2019 and has already resulted in three other lawsuits against the company.

Google on Wednesday, July 7 said that the litigation was about boosting a handful of major app developers that want preferential treatment rather than about helping small businesses or consumers. It maintains that unlike Apple with its App Store on iPhone devices, Android supports competitors to the Play Store.

The company in a blog post said, “Android and Google Play provide openness and choice that other platforms simply don’t,”

Reuters reported that the states, led by Utah, New York, North Carolina, and Tennessee, argue that Google has generated “enormous profit margins” from the Play Store by engaging in illegal tactics to preserve monopolies in selling Android apps and in-app goods.

According to the lawsuit, Google Play accounts for 90 percent of Android apps downloaded in the United States.

The lawsuit stated, “Google leverages its monopoly power with Android to unlawfully maintain its monopoly in the Android app distribution market,”

The report added that states pointed to agreements already targeted in other lawsuits such as those Google has with mobile carriers and smartphone makers to promote its services. After newly reviewing internal company documents, new claims have been added. The major allegation was that  Google bought off developers so they would not support competing for app stores and that through numerous secret projects it intended to pay Samsung, whose rival app store posed the biggest threat, to stop competing.

Other plaintiffs, including California and the District of Columbia, say that Google has unlawfully mandated that some apps use the company’s payment tools and give Google as much as 30 percent of digital goods sales.

The states reportedly said, ” the “extravagant commission,” compared with the 3 percent other marketplaces charge, has forced app makers to raise prices and consumers to spend more.”

Utah Attorney General Sean Reyes said in a statement to Reuters said, “Google Play is not fair play” further adding “It must stop using its monopolistic power and hyper-dominant market position to unlawfully leverage billions of added dollars from smaller companies, competitors, and consumers beyond what should be paid.”

What does states want?

They want the consumers to get their money back. In order to to ensure Google eases the process for consumers, app developers, and smartphone makers to use or promote alternatives to the Play Store and the official payment system for 20 years, they have called for civil penalties and a court-imposed monitor.

The States informed that they have not ruled out taking similar action against Apple over its App Store.

Meghan DiMuzio, executive director for the Coalition for App Fairness said, “Anti-competitive policies stifle innovation, inhibit consumer freedom, inflate costs, and limit transparent communication between developers and their customers.”