O Google became the target of a lawsuit filed by 36 US states and Washington (District of Columbia) on Wednesday (7). The lawsuit questions the 30% rate applied to transactions of the Google Play Store, the app store for Android phones. The case will be analyzed in federal court in California, United States.
The initiative is part of a bipartisan coalition of state attorneys general. The lawsuit is being filed by Washington (DC) and 36 states, such as California, North Carolina, Colorado, South Dakota, Florida, New York, Tennessee, Utah, among others. The list of defendants is made up of Alphabet, Google and subsidiaries in Asia and Ireland.
The process clashes with commission on platform transactions. In addition, for the group of attorneys general, Google uses anti-competitive practices. Thus, according to the action, the company invoices from the 30% rate with the sale of applications through the Google Play Store and still prevents competition in the system.
In the process, the states reported that no other Android store has more than 5% market share. In contrast, the Play Store takes a 90% share. The group also claims that Google takes steps to hinder the growth of other platforms, such as preventing them from advertising in search engines and YouTube.
In March, Google announced a reduction in the Play Store fee. The company said the commission on part of the revenue from applications on the platform would drop to 15%. But the change only achieves gains of up to $1 million; above that, the rate would be 30%.
The lawsuit was filed in federal court in San Francisco, California. The case will be reviewed by Judge James Donato. As noted by the Political, the judge is the same one who scheduled the trial of the case between Epic Games and Google for April 2022.
What does Google say?
Google spoke about the action on its blog the same day. They claimed that Android was built “to create more options in mobile technology”. Afterwards, the company explained that it prepared the Play Store to facilitate the search for apps. The company still says it doesn’t impose “the same restrictions as other mobile operating systems do.”
“Therefore, it is strange that a group of state attorneys general has chosen to file a lawsuit attacking a system that offers more openness and choice than others,” they said. “This complaint mimics an equally unmerited lawsuit brought by major app developer Epic Games, which benefited from the openness of Android by distributing its Fortnite app outside of Google Play.”
Google presented other arguments later. At one point, they claimed that Google Play “competes fairly and vigorously”. The company also says that Android increases competition and choice by allowing the use of other stores.
The company also claims that the platform helps developers and create jobs. According to the company, developers earned more than $80 billion in February 2020. In addition, they claimed that other stores, such as the Galaxy Store (Samsung) and the App Store (Apple), also charge commissions at comparable amounts.
“We understand that scrutiny is appropriate and we are committed to engaging with regulators. But Android and Google Play offer openness and choice that other platforms simply don’t,” they concluded. “This process is not intended to help the little ones or protect consumers. It’s about pushing a handful of big app developers who want the benefits of Google Play without paying for it.”
With information: Bloomberg, Google (Blog), Politico and The Verge