Antitrust Lawsuit Claims Google Harms App Developers, Aims to Erase Consumer Choice with Google Play Store Restrictions [UPDATE]
Last Updated on February 20, 2023
Carr v. Google LLC et al.
Filed: August 16, 2020 ◆§ 5:20-cv-05761
Google faces an antitrust class action alleging “contractual and technological barriers” leave consumers and app developers with no options other than to go through the Google Play Store.
Google Google Ireland Limited Google Commerce Limited Google Asia Pacific Pte. Limited Google Payment Corp.
California
Case Updates
February 20, 2023 – Official Google Developer Antitrust Settlement Website Is Live
The official settlement website for the lawsuit detailed on this page is live and can be found at www.googleplaydevelopersettlement.com.
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According to the site, U.S. app developers who meet the following criteria may be entitled to an automatic minimum cash payment of anywhere from $250 to over $200,000:
“1. Sold an application or in-app product (including subscriptions) for a non-zero price between August 17, 2016 and December 31, 2021; 2. Paid Google a service fee greater than 15% on at least one such transaction between August 17, 2016 and December 31, 2021; and 3. Earned proceeds between U.S. $0 and U.S. $2,000,000.00 through Google Play in every calendar year between and inclusive of 2016 and 2021. For this purpose, the 2016 calendar year shall consist of August 17, 2016 through December 31, 2016.”
To file a claim, head to this page and enter the class ID and confirmation code you received in your personalized settlement notice to begin. If you do not have these login credentials or were not notified of the settlement via email or postcard, enter the Google Play Application Developer Account owner name and email address at the bottom of the page to contact the settlement administrator.
Developers who have received an email or mailed notice of this settlement will receive a physical check, the site says. Those who wish to receive digital payment must submit a valid payment selection form by May 30, 2023, the site states. If you did not receive notice of the settlement but believe you are covered by the deal, you must submit a valid payment selection form by May 30, 2023.
The final approval hearing for this settlement is set to take place on May 18, 2023. If and when the deal receives final approval from the court, and pending the resolution of any appeals and/or objections, payment will be distributed to eligible class members “as soon as possible,” the website states.
According to the settlement site, class members who receive a physical check from the first distribution of money have six months to the deposit the check from the date it was issued.
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August 22, 2022 – Google Settles Antitrust Suit with Developers for $90 Million
Google has agreed to a $90 million settlement with thousands of U.S. Android developers to end the proposed class action detailed on this page and several related lawsuits.
The plaintiffs’ motion for preliminary settlement approval relays that nearly 48,000 Android developers with earnings of $2 million or less between August 17, 2016 and December 31, 2021 should expect“substantial monetary payments,” in addition to relief meant to improve the Google Play Store and help developers better monetize their products.
In particular, the relief includes an agreement by Google to maintain a program under which developers pay a reduced service fee on their first $1 million in annual revenues until at least May 2025. Additionally, Google has agreed to develop an “Indie Apps Corner” that highlights apps from independent and startup developers on the apps tab of the Google Play Store homepage.
Google has also agreed to change its developer distribution agreement to make it clear that developers can use contact information obtained in-app to communicate outside the app with users about alternatives to Google Play’s billing service for in-app purchases. Google will also make changes to the Android 12 operating system that will allow auto-updates from third-party Android app stores and has agreed to publish an “annual transparency report” that provides developers with “meaningful data regarding the operation of the Google Play store.”
“Antitrust cases are inherently risky and, while Developer Plaintiffs believe their claims are sound, recovery is far from certain,” the motion states. “If approved, the Settlement will deliver assured, substantial relief to a Settlement Class that could receive less value, or nothing at all, from a litigated outcome.”
If and when the deal is preliminarily approved by the court, developers who are covered by the settlement will receive direct notice via email and physical mail. Settlement administrators will also execute a “robust, state-of-the-art media campaign,” including programmatic advertising and social media, to broadcast word of the deal. They will also set up an official settlement website—www.googleplaydevelopersettlement.com—and a toll-free phone number.
ClassAction.org will update this post when the official settlement website goes live. (Head to this page to sign up to be alerted when the official settlement website is activated.)
A preliminary approval hearing is scheduled for August 4, 2022.
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January 19, 2022 – Trial Date Set for January 2023
The parties in the case detailed on this page have agreed to a January 2023 trial, meaning consumers will potentially need to wait another year before seeing a resolution.
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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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