Google Play Store lawsuit: dozens of US states sue App Store practices

The lawsuit alleges that Google abused its dominance in the mobile ecosystem to favor its own Google Play Store, thereby reducing competition. The lawsuit also covers the costs that Google (GOOGL) charges developers for in-app purchases.

Court records reviewed by CNN Business on Wednesday showed the case against Google had been opened in U.S. District Court for the Northern District of California. The District of Columbia and 36 states are nominated as participants, including New York, California, Colorado, Utah, Massachusetts and others.

According to Wednesday’s complaint, Google has a monopoly on the distribution of Android apps in the United States and has used restrictive contracts to force manufacturers of Android devices to promote the Google Play Store at the expense of competition. (Similar allegations in Europe prompted Google to announce in 2018 that it would stop bundling must-have apps like Google Maps and Gmail with the Play Store.)

Part of Google’s alleged goal was to deter the rise of third-party app stores. According to the complaint, Google has made “a direct attempt to pay Samsung to abandon its relationship with the best developers” so that the Google app store remains the most attractive source of Android applications.

The complaint also challenges Google developers’ terms that “make Google Play Billing the only integrated payment processor an Android developer can use” when an app sells digital content through an Android app.

This is similar to the allegations made against Apple in its case involving Epic Games.

“Google is using its market dominance to stifle competition and extract billions of dollars in in-app purchase commissions from unsuspecting consumers, and this anti-competitive behavior must end,” said District of Columbia Attorney General Karl Racine, in a press release. “Not only has Google acted illegally to prevent potential competitors from competing with its Google Play Store, it has profited by inappropriately locking app developers and consumers into its own payment processing system and then charging a fee. high. “

Google responded to the lawsuit in a blog post, saying that “it is strange that a group of attorneys general have chosen to file a lawsuit attacking a system that offers more openness and choice that others”.

The allegations mark the latest legal headache for Google, which already faces several federal and state antitrust lawsuits. They also reflect growing criticism from app developers and regulators who have increasingly scrutinized Google and Apple’s app stores in the mobile tech space.

News of the trial was greeted with cheers. For example, the Coalition for App Fairness – a nonprofit industry organization whose members include Spotify, Tile, and Match Group – said it supports the lawsuit.

â€œApp stores have been given a free pass to abuse their market dominance for too long,â€ the group said. “Their anti-competitive policies stifle innovation, hamper consumer freedom, inflate costs, and limit transparent communication between developers and their customers.”

In the spring, Apple and Epic Games clashed in a no-jury trial over whether Apple has a monopoly on iOS app sales and has abused its power against app makers. Epic, the maker of the online video game “Fortnite”, had sought to bypass Apple’s integrated payment system that allows the iPhone maker to cut digital goods and services sold on iOS by 30%. This led to a contractual dispute which prompted Apple (AAPL)to remove Fortnite from its app store, which ultimately led to Epic’s lawsuit, which could disrupt Apple’s business model.

Apple argued at trial that it competes vigorously to distribute video game applications, including Fortnite. A decision in this case is expected in the coming months.