State Attorneys General File New Antitrust Lawsuit Against Google Over App Store

Google is facing another antitrust lawsuit from a coalition of attorneys general, as the government officials target the tech giant for its business practices, claiming that it is trying to gain an unfair advantage for its own streaming services via its app store.

The lawsuit is the second filed by the coalition, after the attorneys general sued Google in December over its search practices. The Justice Department and other state groups also have filed antitrust challenges, including over its advertising conduct.

In the latest lawsuit (read it here), the 37 AGs focus on the Google Play Store, charging that Google “has taken steps to close the ecosystem from competition and insert itself as the middleman between app developers and consumers.”

“Unbeknownst to most consumers who own a mobile device running Android, every time they purchase an app from the Google Play Store, or purchase digital content or subscriptions within an app, up to 30% of the money they pay goes to Google,” the lawsuit stated.

The AGs claim that Google has engaged in anticompetitive conduct to “diminish and disincentivize” competition in Android app distribution.

“Google did not stop at excluding potential threats to its app distribution monopoly and extracting monopoly rents for app distribution,” the lawsuit stated. “Google also ensured it could continue to reap windfall commissions from apps after the Google Play Store distributed them to consumers— often months or even years later. Namely, Google imposed the same extravagant commission of up to 30% of any future digital purchase a consumer might make within an app. For all apps that consumers obtain from the Google Play Store, Google requires that consumers purchase any in app digital content through Google Play Billing. By imposing this unduly restrictive and anticompetitive tie, Google can indefinitely collect supracompetitive commissions from consumers who purchase in-app digital content.”

The lawsuit also stated that Google requires that all app developers who sell content through the Google Play Store sell in-app content through Google Play Billing.

“Though it has been inconsistent in the past, Google now stringently enforces this tie by preventing apps distributed through the Google Play Store from using, directing consumers to, or even informing consumers about alternative payment processing options that may provide lower prices.” the lawsuit stated. “Consumers who want to purchase any such content must, therefore, do so through Google Play Billing.”

The lawsuit also noted that starting in September, 2021, video and music streaming services, which were previously exempt from the practices, “must either submit to Google’s tie or deny consumers the ability to purchase subscriptions from their Android apps. Google’s comparable streaming services will gain an enormous competitive advantage.”

The lawsuit was filed in U.S. District Court in San Francisco. Attorneys general in Utah, New York, North Carolina and Tennessee were the lead plaintiffs. Also among those signing on to the lawsuit was the state of California.

A spokesperson for Google did not immediately return a request for comment.

Last month, a federal judge in D.C. tossed out lawsuits brought by the FTC and state attorneys general against Facebook.

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