New York TimesJuly 8, 2021 12:22:17 PM IST
A group of 36 states and the District of Colombia sued Google on Wednesday, alleging that its mobile app store is abusing its market power and forcing aggressive terms on software developers, extending the legal challenges for Internet search giants.
The suit is the fourth state or federal competition lawsuit filed against Google since October, but the first has investigated the company’s lucrative app business. Utah, North Carolina, New York, and Tennessee resulted in a lawsuit filed in federal court in the Northern District of California.
Mobile app developers have disputed the way Google allows them to use their own system to pay for some of their products. This system charges a 30 percent fee in addition to many transactions, which developers say forces them to charge higher prices for their services.
The trial reiterated these concerns, saying that Google took control of mobile app distribution on the Android smartphone operating system.
“Because of Google’s anti-competitive behavior, the market share of the Google Play Store – well over 90 percent – is not subject to credible threats, and market forces cannot put pressure on out-of-competition rewards,” the complaint found.
Google called the lawsuit “unworthy” in its blog post. It said it was strange that the lawyers had decided to attack its Play store instead of rival Apple.
“Android and Google Play offer transparency and choice in what other platforms simply don’t do,” wrote William White, senior director of Google White. “This lawsuit isn’t about helping a little guy or protecting consumers. It’s about promoting a few big app developers who want the benefits of Google Play without paying for it. “
The lawsuit previously reported Bloomberg news, shows that state and federal regulators continue to investigate Google ‘s business world for examples of monopolistic practices. For years, regulators chose not to act against Google even if its companies grew in a dominant position and competitors complained about how it unfairly used its power.
Recently, a number of antitrust complaints from Google have focused largely on search and advertising. The Department of Justice sued the company last year for allegations that it illegally protected its monopoly on online search advertising. In a subsequent demand from state law ministers, Google was accused of abusing advertising technology, and they sued it separately for squeezing small search services.
Google has claimed to allow other companies, such as Samsung and Forticite creator Epic Games, to maintain app stores for their Android software. In the complaint, the states stated that while the Google Play Store accounted for more than 90% of all Android apps in the U.S., no other Android app store had more than 5% of the market.
Complaints combine other cases involving technology giants or investigations into their practices. The Federal Trade Commission and a group of states filed competition lawsuits against Facebook last year; the judge dismissed the appeals last month. The FTC has also investigated the Amazon, and the Department of Justice has asked questions about Apple’s business.
Apple, which maintains another major smartphone app store, is also under scrutiny for app sales and subscriptions by developers. Epic Games sued Apple over antitrust law last year, accusing it of abusing its market power to charge app makers unfairly high fees. It is awaiting a decision on this next month.
With the money flowing through Apple and Google’s marketplaces growing to tens of billions a year, developers said companies charge too much for access. Because the software from these two companies controls almost every smartphone in the world, they say developers have no choice but to follow their policies and pay the fees.
Last year, Google began cracking down on subscription-based app developers like Netflix and Spotify that circumvented the company’s payment system to avoid payments in the Play Store. Google said at the time it was providing clarity on what types of transactions required the use of its payment system. It had said it would start trying to integrate its payments into Google’s billing system in September 2021.
But as the Play Store antitrust began to build, Google said this year it would cut developer store fees from its first $ 1 million in revenue annually to 15 percent from 30 percent.
The lawsuit on Wednesday also puts pressure on how Apple maintains its own App Store. While Android lets people go around the Play Store and add apps to their phones in other ways, Apple’s mobile software doesn’t. In practice, that means there’s no alternative to installing the software on your iPhone without visiting the App Store.
“Application trading issues are so clearly in Apple’s strike zone,” said Alex Harman, public citizen’s competition policy officer, a group that has pushed for more aggressive enforcement of antitrust rules against technology giants.
Utah attorney Sean Reyes said in an interview that he was interested in the issues raised by Apple’s policies. “Nothing in this lawsuit or investigation is preventing us from investigating or challenging any other party,” he said.
Apple did not return the comment request.
This article originally appeared New York Times.
David McCabe and Daisuke Wakabayashi [c.2021 The New York Times Company]