Google has violated federal antitrust laws by erecting “contractual and technological barriers” that essentially prevent Android users from downloading apps from anywhere other than the Google Play Store, harming in the process app developers left with no choice but to give in to the tech giant’s restrictions, a proposed class action lawsuit alleges.
According to the 71-page complaint out of California federal court, Google, unsatisfied with its control over the Android operating system (OS) market and embodying the role of intermediary in “every digital content purchase” made on an Android-distributed app, has sought to “further strengthen its monopoly power” by way of an anticompetitive scheme that harms both smartphone users and app developers, who have “no choice but to acquiesce to” the defendant’s restrictions on entry into the Google Play Store.
“Through its behavior, Google intends to eliminate consumer choice, foreclosing competition in mobile app distribution,” the lawsuit alleges, claiming Google’s competition-suppressing stranglehold also applies to in-app payment processing, digital content purchases and advertising. “There is no legitimate procompetitive justification for Google’s conduct and restrictions.”
For original equipment manufacturers (OEMs) who design and sell smartphones and tablets, Google’s Android operating system is the only commercially viable OS that’s widely available to license, the suit begins. Put simply, because OEMs have the Android OS, boasting nearly three million compatible apps and used by billions worldwide, as the lone mobile operating system option, Google wields monopoly power over the market for mobile operating systems available for license, the lawsuit says.
Despite this level of control, however, defendants Google LLC, Google Ireland Limited, Google Commerce Limited, Google Asia Pacific Pte. Limited and Google Payment Corp.—together, Google—have sought to tighten their grip by preventing Android users from utilizing any app distribution platform other than the Google Play Store, the complaint alleges.
One of Google’s tactics, the lawsuit says, is the bundling of the Google Play Store with other Google services OEMs must include on their devices, such as Gmail, Google Search, Maps and YouTube. Then, as a condition to license those services, Google mandates that a manufacturer pre-install the Google Play Store and prominently display it while “interfering” with an OEM’s ability to make third-party app stores or apps available to users, the case says, claiming these maneuvers essentially shut the door to anyone looking to encroach upon Google’s app-store turf.
“These restrictions effectively foreclose competing app stores—and even single apps—from a primary distribution channel,” the suit says.
Aside from Android users, Google’s alleged conduct harms app developers, who, for one, are contractually prohibited from offering an app through the Google Play Store that can, in turn, be used to download other apps, the complaint relays. Moreover, Google has made it a condition for app developers to use the Google Play Store in order to take advantage of Google-controlled advertising channels, such as placement in search results or on YouTube, the case says.
The bird’s eye view of the extent of Google’s control over everything from search engine results to advertising leaves app developers with no choice but to bow to the company, the suit attests.
“Because Google also has a monopoly in internet searches, app developers have no choice but to acquiesce to Google’s anticompetitive restrictions on Google Play,” according to the lawsuit.
Ultimately, consumers are blocked by Google from being able to download alternative app stores or apps directly from developers’ websites, with the process for doing so requiring multiple steps related to changing default settings and clicking through multiple warnings, the complaint goes on. Even if a user weathers the process and manages to install a competing app store, Google blocks the store from offering basic functions, including automatic background updates such as those seamlessly available for apps downloaded from the Google Play Store, the suit alleges.
Still further, Google’s anticompetitive course of action bleeds into its handling of in-app payment processing, the case argues, alleging the company prohibits app developers from allowing payment processing tools other than Google Play Billing through exclusivity agreements.
“This essentially forces app developers to use both Google Play Store and Google Play Billing because Google’s monopoly over the Android App Distribution Market means developers cannot circumvent this anticompetitive tie by distributing their content through a channel other than the Google Play store,” the complaint reads, highlighting that Google’s payment setup assures it receives payment for in-app purchases first, before the developer.
Per the suit, such transactions are taxed by Google at a “supra-competitive” 30-percent rate, earning the company a commission “up to ten times higher than the toll charged by other electronic payments.”
Absent Google’s competition-suppressing conduct, competitors could offer consumers and developers a choice in the smartphone and tablet app arena, the lawsuit summarizes, and entities looking to distribute apps through a competing store could lend a wider array of innovations and choices with regard to in-app payment processing.
The lawsuit’s filing comes amid a showdown between “Fortnite” creator Epic Games and both the Apple App Store and Google Play Store over the 30-percent cut taken by both entities on app sales. Earlier this week, Epic filed lawsuits against Apple and Google in response to the companies’ removal of Fortnite from their respective app stores after the developer introduced a new, direct way to pay for V-Bucks, the in-game currency, at a 20-percent discount and outside of the tech giants’ app stores.
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