October 23, 2020 – Google, Alphabet Hit with More Antitrust Litigation
Google and Alphabet have been hit with at least one more proposed class action centered on allegations that the companies have violated federal antitrust laws with regard to their apparent monopolization of the Android app market.
The suit, filed October 20 in California federal court, echoes the lawsuit detailed on this page in claiming that while Google’s Android operating system is maintained as purportedly “open” source software, the embattled tech giant’s conduct aims to “deter competition” in the Android mobile app market. As a result of Google’s series of competition-suppressing actions, consumers have overpaid for Android apps and suffered other economic losses, the 23-page lawsuit says.
Less than 24 hours after being hit with what many consider a landmark antitrust case by the U.S. Department of Justice, Google faces a proposed class action that alleges the company has deterred and eliminated competition in the market for Android apps and in-app products through a number of “restrictive agreements” and other anticompetitive conduct.
Filed in California federal court, the 19-page lawsuit alleges Google’s methods of squashing competition have caused Android operating system users to pay “supracompetitive” prices for apps purchased through the Google Play Store, which, according to the complaint, boasts “more than 90 percent” of all Android mobile app downloads worldwide.
The suit claims Google has been able to generate more than $21.5 billion in “ill-gotten revenue,” thanks in part to the 30-percent cut it takes from every mobile app and in-app purchase facilitated by the Play Store. A two-fold side effect of Google’s 30-percent cut, the case says, is that app developers have been forced to set higher prices for reduced-quality apps due to the high costs of entry imposed on them by the defendant.
According to the lawsuit, Google has designed the greater Android ecosystem to ensure that other sources of mobile apps are “less desirable or of inferior quality.” To access a “rival” mobile app, an Android user must either rely on an app store other than the Play Store to be installed on their mobile device, download the app from another app store, or “sideload” an app onto their smartphone or tablet, per the suit. As the complaint tells it, Google has, through a series of anticompetitive moves, “thwarted meaningful user access” for each of these methods.
From the lawsuit:
“First, Google has successfully demanded and reached agreements with mobile device OEMs [original equipment manufacturers] that require the OEMs to pre-install and prominently display the Google Play Store on all mobile devices. Pre-installation is crucial because, as Google explains, ‘most users just use what comes on the device. People rarely change defaults.’
Second, Google, as the proprietor of the Google Play Store, has exercised its monopoly power by refusing to allow any rival app stores to be accessed through the Google Play Store.”
Overall, the only practical way for an Android user to access a third-party app store would be through sideloading, which the lawsuit says Google “theoretically permits” yet has hampered by way of “significant frictions” meant to divert users away from the complicated process. Even those who are able to successfully install a rival app store on their Android device may be limited as far as what third-party apps can do, the case relays.
“Mobile app developers must acquiesce to Google’s demand because leaving the Google Play Store to distribute software to Android users via sideloading or through third-party app stores causes precipitous declines in downloads and revenue.”
The lawsuit looks to represent:
“All persons in the United States who, within the relevant statute of limitations (the ‘Class Period’): (1) paid for a mobile app on the Google Play Store; (2) paid subscription fees for a mobile app obtained on the Google Play Store; or (3) purchased in-app digital content from a mobile app that was downloaded at the Google Play Store.”
Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.