Tennessee Attorney General Herbert H. Slatery III, along with a coalition of 37 attorneys general, have filed a lawsuit against Google in California.
The lawsuit alleges exclusionary conduct related to the Google Play Store for Android mobile devices and Google Play billing.
This antitrust lawsuit is the latest in many lawsuits claiming the tech giant uses illegal, anti-competitive and unfair business practices.
States accuse Google of using its dominance to unfairly restrict competition with the Google Play Store, behavior that hurts consumers by limiting choice and driving up app prices.
âGoogle’s ‘game’ was the long game: getting manufacturers and operators to adopt Android by promising to stay open,â General Slatery said. âNow that digital door is closed – if you want to come in, you have to go Google’s way. You basically have to use their app store, use their payment processing system, and pay their unreasonable commissions for digital purchases. All of this hurts consumers, limits competition and reduces innovation. Tennessee and 36 other states are no longer on the sidelines. “
The subject of the lawsuit is Google’s exclusionary conduct, which significantly excludes competing means for consumers to obtain apps. Google is also inserting Google Play Billing as an unwanted and overpriced middleman between app developers and consumers, for apps installed from the Play Store. The arrangement, which ties a payment processing system to an app distribution channel, requires consumers to pay Google’s commission – up to 30% – on digital content purchases through the app. This commission is much higher than what consumers would pay in a competitive market.
The lawsuit alleges that Google is trying to discourage or prevent competition, in violation of federal and state antitrust laws. Google had promised app developers and device makers that it would keep Android âopen sourceâ, allowing developers to build compatible apps and distribute them without unnecessary restrictions. The lawsuit says Google broke that promise.
When Google launched its Android operating system, it initially marketed it as an “open source” platform. By promising to keep Android open, Google has succeeded in convincing âOEMsâ – manufacturers of mobile devices, such as Samsung, and âmobile network operators,â mobile network operators such as Verizon – to adopt Android. and, more importantly, to give up competition with the Google Play Store at this point.
Once Google had obtained the “critical mass” of adoption of the Android operating system, Google decided to close the Android operating system ecosystem and the corresponding Android application distribution market to any effective competition in imposing, among other things, on OEMs and MNOs contractual and other constraints. .
These contractual restrictions discourage and prevent OEMs and mobile network operators from competing or fostering competition in this market and block further innovation. The lawsuit alleges that Google’s conduct constitutes an illegal maintenance of a monopoly, among other claims.
The GAs allege that Google has also adopted the following behavior, all aimed at improving and protecting Google’s monopoly position on the distribution of Android applications:
â¢ Google imposes technical barriers that strongly discourage or effectively prevent third-party application developers from distributing applications outside of the Google Play Store. Google incorporates a series of security warnings into Android – regardless of the actual security risk – and other barriers that discourage users from downloading apps from any source outside of the Google Play Store, preventing thus application developers and direct-to-consumer distribution application stores.
â¢ Google did not allow Android to be truly âopen sourceâ for many years, which cut off potential competition. Google requires OEMs who wish to sell Android to enter into agreements called âAndroid Compatibility Commitmentsâ or ACC. Under these take it or leave it agreements, OEMs must commit not to create or implement variants of Android that deviate from the Google certified version.
â¢ Google’s contractual requirements prevent competition by requiring that the Play Store and many other Google apps be âpreloadedâ on virtually all devices designed to run on the Android operating system, and have the most space. visible on device home screens.
â¢ Google âbuys backâ its potential competition in the application distribution market. Google has been successful in persuading OEMs and MNOs not to compete with the Play Store by making deals that reward OEMs and MNOs with a share of Google’s monopoly profits.
â¢ Google requires app developers and app users to use Google’s payment processing service, Google Play Billing, to process payments for in-app purchases of content consumed in the app. Thus, Google illegally links the use of Google’s payment processor, which is a separate service within a separate marketplace, for in-app payment processing, to distribution through the Google Play Store. By forcing this link, Google can extract outrageous processing fees of up to 30% for each transaction, which is more than 10 times what other payment processors charge.
This effort is led by Utah Attorney General Sean D. Reyes, New York Attorney General Letitia James, North Carolina Attorney General Josh Stein, and Tennessee Slatery Attorney General. States joining the lawsuit include Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota , Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington and West Virginia.