Dozens of states sue Google over app store charges

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WASHINGTON – A group of 36 states and the District of Columbia sued Google on Wednesday over allegations that its mobile app store is abusing its market power, expanding the legal challenges facing the internet search giant.

This is the fourth state or federal antitrust lawsuit against Google since October, but the first to scrutinize the company’s lucrative app store. He was filed in federal court in the Northern District of California. Utah, North Carolina, New York and Tennessee led the pursuit.

Mobile app developers have taken issue with the way Google makes them use its own system for certain payments in their products. This system charges a 30% commission on many transactions, which the developers say then forces them to charge higher prices for their services.

“Due to Google’s anti-competitive behavior, the Google Play Store’s market share – which is well over 90% – faces no credible threat, and market forces cannot exert pressure on its supercompetitive commissions,” the company said. complaint.

The lawsuit reports that state and federal regulators continue to investigate Google’s corporate empire for examples of monopoly practices. For years, regulators chose not to act against Google even as its business became more dominant and rivals complained about how it was unfairly using its power.

The recent spate of antitrust complaints against Google have largely focused on search and advertising. The Justice Department sued the company last year for claiming it was illegally protecting its monopoly on online search advertising. A subsequent trial by state attorneys general accused Google of abusing its power over ad technology, and they sued it separately for crushing smaller search services.

Google has argued that it allows other companies, such as Samsung and Epic Games, the creator of Fortnite, to operate app stores for its Android software. In the complaint, states said the Google Play Store is the source of over 90% of all Android apps in the United States, and no other Android app store has more than 5% of the market.

Google did not respond to a request for comment. The lawsuit was reported earlier by Bloomberg.

The complaints join other cases against the tech giants or investigations into their practices. The Federal Trade Commission and a group of states both filed antitrust lawsuits against Facebook last year; a judge dismissed the complaints last month. The FTC has also investigated Amazon, and the Department of Justice has asked about Apple’s activities.

Apple, which operates the other major smartphone app store, is also coming under scrutiny for cutting app sales and developer subscriptions. Epic Games filed an antitrust lawsuit against Apple last year, accusing it of abusing its market power to charge app makers unfairly high commissions. He expects a decision on the case next month.

As the amount of money circulating in Apple’s and Google’s markets reached tens of billions a year, the developers said companies were charging too much a tax for access. Since the two companies’ software controls nearly every smartphone in the world, they said, developers have no choice but to adhere to their policies and pay the fees.

Last year, Google began cracking down on subscription app developers like Netflix and Spotify who bypassed the company’s payment system to avoid paying fees in its Play Store. Google said at the time that it was clarifying the types of transactions needed using its payment system. The company said it would start forcing businesses to integrate their payments into Google’s billing system in September 2021.

But as antitrust scrutiny on the Google Play Store began to develop, the company said this year it would reduce store fees for developers on the first million dollars in revenue each year to 15% from 30%.

The lawsuit also puts pressure on how Apple runs its own App Store. While Google’s Android smartphone operating system allows people to bypass the Play Store and add apps to their phones in other ways, Apple’s mobile software doesn’t. Effectively, this means that there is no alternative to putting software on an iPhone without going through the App Store.

“The App Store’s problems are so clearly in the strike zone for Apple,” said Alex Harman, competition policy advocate at Public Citizen, a group that has been pushing for a more aggressive antitrust enforcement against them. giants of technology.

Sean Reyes, the Attorney General of Utah, said in an interview that he was interested in the issues raised by Apple’s practices.

“Nothing in this lawsuit or investigation prevents us from investigating or filing a case against another entity,” Reyes said.

Apple did not immediately return a request for comment.

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