Alphabet Inc.’s Google is being sued by 37 US state and district attorneys general who allege that the online media leviathan “bought off” competitors and used restrictive contracts to unlawfully maintain a monopoly for its app store on Android phones.
According to Reuters, these allegations about the Google Play Store began as an investigation launched by nearly every state in the US, beginning in September 2019. Three other lawsuits were also launched since the investigations concluded.
Below are comments by New York’s attorney general via Twitter:
We won’t allow companies to illegally quash competition so they can make billions.
We are seeking to end Google’s monopoly power and fight for millions of consumers and small business owners in New York and beyond.
— NY AG James (@NewYorkStateAG) July 7, 2021
This new case threatens to force major changes to how Google generates billions of dollars in revenue across all of its many businesses – including advertising, in-app purchases and smart home gadgets.
Google Responds to Allegations
On Wednesday, Google said that the litigation was about boosting a handful of major app developers that want preferential treatment rather than about helping small businesses or customers as is currently claimed.
The company maintains that unlike Apple with its App Store solely for iPhones and iOS, Android supports competitors to the Play Store.
“Android and Google Play provide openness and choice that other platforms simply don’t,” the company said in a blog post.
Google’s Play Store “Monopoly”
Leading the lawsuit are states: Utah, New York, North Carolina and Tennessee, which all argue that Google has been generating “enormous profit margins” from the Play Store by engaging in alleged “illegal tactics to preserve monopolies in selling Android apps and in-app goods.”
Google Play accounts for 90% of Android app downloads in the US, according to the lawsuit. Which further claims that “Google leverages its monopoly power with Android to unlawfully maintain its monopoly in the Android app distribution market.”
The states have pointed to agreements already targeted in other, similar lawsuits – such as those Google has with certain mobile carriers and smartphone manufacturers to promote its services.
Fresh claims in the lawsuit are alleging that Google has been buying off app developers so that would not support competing app stores. Another claim alleges that Google has numerous secret projects aimed at paying Samsung, whose rival app store poses Play Store’s biggest threat, to stop competing.
The lawsuit says that while Google does allow users to avoid the Play Store entirely, it displays “generally misleading warnings and hurdles” to discourage this behaviour.
“Google Play is not fair play,” Utah Attorney General Sean Reyes said in a statement.
“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.”