This is just the latest antitrust action against Google, which is also facing state and federal lawsuits over its dominance of online advertising and search. While the outcome of the app store lawsuit is uncertain, some advocates think that the growing pressure on both Google and Apple could ultimately prompt them to lower or eliminate their app fees.
“Because of Google’s anticompetitive conduct, Google Play Store’s market share—which is well over 90 percent—faces no credible threats, and market forces cannot exert pressure on its supracompetitive commissions,” the suit says, which was filed in the Northern District of California and is led by attorneys general in North Carolina, Utah, New York, and Tennessee.
Google, for its part, called the suit “meritless,” claiming instead that Android and Google Play store increase competition and choice.
“This lawsuit isn’t about helping the little guy or protecting consumers. It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it,” William White, the company’s director of public policy, wrote in a blog post.
A group of app developers, including Spotify, Match, and game developer Epic, that filed an antitrust suit against both Google and Apple last August, is pushing back against the Play store business model.
“App stores have been given a free pass to abuse their dominant market position for far too long,” Meghan DiMuzio, executive director for The Coalition for App Fairness, said in a statement on the group’s website. “We support these attorneys general’s efforts to enforce fairness in the app marketplace and urge lawmakers and regulators to find solutions that level the playing field for developers and provide consumers with more choices.”
This week’s lawsuit comes on the heels of a broad state and federal antitrust case that was brought against Google last October, which alleges that the search giant entered into anti-competitive agreements with phone manufacturers such as Apple and Samsung, as well as with wireless carriers and browser developers. That lawsuit calls Google “a monopoly gatekeeper to the internet.”
An additional state government suit, filed in December, which has been consolidated with the October case, claims that Google unfairly hurt the company’s rivals in search.
Here’s a discussion of how this week’s Play Store suit could play out, how it fits into the broader landscape of other antitrust actions, and how it will affect consumers.
What Is This Suit About?
It centers on the pay structure of Google’s app store. App developers who use the Play store must give Google a cut—often as large as 30 percent—of in-app purchases, such as the virtual tools that enhance your game play or songs or movie clips. (Google recently reduced that fee to 15 percent of an app developer’s first $1 million in revenue from the store every year.) Google recently changed its rules to make it harder for subscription-based apps, such as Netflix and Spotify, to sidestep these fees.
Does This Have Anything to Do With Apple’s App Store?
While this case doesn’t involve Apple directly, the company, which charges developers a similar 30 percent fee in its own App Store, is dealing with many of the same issues as Google. Epic Games, the creator of the wildly popular game Fortnite, for example, filed suit against both companies last year, making similar antitrust claims. (Apple, in a court filing, called the suit “…….