States bring new antitrust suit against Google over Google Play

Google announced last week that 60% of its workforce will be working in the office around three days a week, 20% in new office locations and 20% from home.

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The attorneys general are taking another antitrust lawsuit against Google, this time alleging that the company has abused its power over app developers through its Play Store on Android.

The case is the fourth antitrust lawsuit filed against the company by US government enforcers last year.

By focusing on the Play Store, the latest lawsuit touches an aspect of Google’s business that is most similar to Apple’s. The Apple App Store has encountered legal challenges and has raised questions from legislators as to whether it is wrongly charging developers for payments through their apps by customers and whether it prefers its own apps over those of its competitors.

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

Plaintiffs allege Google used anti-competitive tactics to remove 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, also because Google has targeted “potentially competing app stores”. In the meantime, consumers have no options as Android is the only operating system available on many phones.

The Google Play Store sells over 90% of Android apps in the US, while no other Android store has a market share of over 5%, according to the plaintiffs. They explicitly name Samsung, the leading manufacturer of Android phones, and say that Google has tried to “buy out” the company by offering incentives to turn its Galaxy App Store into a “white label” for the Play Store. Google has also thwarted previous efforts by Amazon to have its own distribution store on Android.

“Google’s enduring monopoly power in the markets for the distribution of Android apps and in-app purchases is not based on pure competition,” said the lawsuit. “These monopolies are sustained by artificial technological and contractual conditions that Google imposes on the Android ecosystem.”

In addition to the recent antitrust challenge, Google is facing an ongoing lawsuit from the Department of Justice and several states alleging that it used exclusion agreements to ensure the default status of its apps on devices from manufacturers using its Android mobile operating system. It is also facing a lawsuit by a group of Republican attorneys general focused on their advertising technology business, alleging they entered an anti-competitive agreement with Facebook.

The third lawsuit prior to this latest challenge came from a bipartisan group of attorneys general that went beyond the DOJ’s allegations of excluding contracts. The lawsuit alleged that Google was restricting vertical search providers like Yelp and Tripadvisor from reaching consumers through “discriminatory behavior on the search results page.”

In the latest Android case, plaintiffs say consumers are harmed by a lack of innovation, among other things. Google has no incentive to provide a better service, and no other developers or app stores have channels available to reach large numbers of people.

“Instead of simply creating a better app sales experience, Google uses anti-competitive barriers and mandates to protect its monopoly power and to increase its over-competitive revenues from the Google Play Store and Google Play billing,” the complaint said.

The plaintiffs say they want to “restore competition and prevent Google from doing similar things in the future”.

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