US states sue Google over app monopoly and ‘extravagant commissions’

8 Jul 2021

Image: © Aleksei/Stock.adobe.com

In what Google called ‘a meritless lawsuit’, 36 US states are taking legal action over claims of monopolisation in the Google Play Store.

Dozens of attorneys general in the US have launched an antitrust lawsuit against Google. The attorneys general represent 36 US states, including Utah, North Carolina, Florida and New Jersey, as well as the District of Columbia.

The suit was filed in a California court yesterday (7 July).

The focus of the legal action is the Google Play Store – Google’s method of distributing apps for Android software.

In the suit, the tech company is accused of “unlawfully restraining trade and maintaining monopolies in the markets for Android software application distribution”.

Google Play accounts for 90pc of Android apps downloaded in the US, according to the suit. It says that Google promised an open ecosystem for app development after acquiring Android in 2005.

“Google has not kept its word,” it adds.

The tech giant can receive up to 30pc of transactions on the Google Play Store through its commission structure.

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The suit claims that this “extravagant commission” is maintained through anticompetitive tactics in the market of Android app distribution, where developers are given “no reasonable choice” but to distribute their apps through the Google Play Store.

New York attorney general Letitia James said that the aim of the lawsuit is to “end Google’s monopoly power and fight for millions of consumers and small business owners in New York and beyond”.

Google publicly responded to the legal action in a blog post, denying any unfair monopolisation and calling it “a meritless lawsuit that ignores Android’s openness”.

“The complaint is peppered with inflammatory language designed to distract from the fact that our rules on Android and Google Play benefit consumers,” it added. “We stand behind apps distributed on Google Play, so we do have some rules to keep the store secure, protect privacy and prevent fraud.”

Unpacking the complaints leveraged against it, Google said that a 15pc commission exists for 99pc of those who sell digital content in its store, and that the 30pc commission only exists for those who make more than $1m.

Google said the transaction fees are comparable to those in the Amazon, Apple and Samsung app stores. However, Apple in particular has also been under the spotlight recently for its App Store practices.

This isn’t the only legal action Google has faced this week, as former US president Donald Trump has Google, Facebook and Twitter in his sights.

At a press conference yesterday, Trump said he was suing the companies over an infringement of his right to free speech on social media platforms. He was banned from Facebook, Twitter and Google-owned YouTube after the Capitol riots in Washington DC in January.

Sam Cox is a journalist at Silicon Republic covering sci-tech news

editorial@siliconrepublic.com