Google Play Store Triggers Antitrust Lawsuit From 36 States

Nearly three-quarters of the state attorneys general in the US have filed a lawsuit against Google in a California federal court. They argue that Google has undermined competition in an effort to force developers and consumers to use Google Play, its app store. Google Play occupies over 90 percent of the market for Android apps. This leaves developers with few alternatives to get their apps to consumers. Since many handsets operate only with Android, consumers also have few alternatives. This has allowed Google to charge a 30 percent commission to people who use Android phones to get subscriptions and digital content.

The attorneys general argue that Google has used improper methods to gain its stranglehold over the market. For example, they point out that Google has prevented Amazon from using its own Android distribution store. They also have claimed that Google tried to induce Samsung, the leading Android phone maker, to make its app store a white label for Google Play. (A white label product is a product made by one company but rebranded by another company to give consumers the impression that the rebranding company made it.) In other words, Google allegedly does not dominate the distribution market for Android apps because it offers the best option on the market. Instead, according to the attorneys general, Google has created artificial conditions that benefit it. The absence of competition removes any incentive for Google to innovate and provide a better service for consumers.

This case against Google echoes litigation involving the Apple app store. Plaintiffs in those cases, as well as politicians, have accused Apple of undercutting competition by giving preferred treatment to its own apps on its app store, among other practices. Apple also collects fees from in-app payments by consumers to app developers.

Google responded by claiming that it offers a more open system than its competitors. It also pointed to the Apple app store as competition for Google Play and noted that consumers can access other app stores on Android devices. A similar lawsuit filed by a private party against Google ultimately failed.

However, Google now faces four antitrust lawsuits in various settings. Another group of attorneys general has attacked its advertising technology business, asserting that Google and Facebook reached an agreement that undermined competition. Meanwhile, the Department of Justice has joined various states in suing Google for its alleged use of exclusionary contracts. The plaintiffs claim that these contracts required manufacturers that use the Android mobile operating system to make Google apps the default options on their devices. Yet another lawsuit targets the Google search results page. This group of attorneys general argues that Google has discriminated against vertical search providers, such as Yelp, in an effort to hinder consumers from accessing them.

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