Google Faces Court Action By US States Over Play Store Fees

Alphabet’s Google is once again facing another antitrust lawsuit, this time concerning the Google Play Store.

On Wednesday 37 US state attorneys general filed an antitrust lawsuit in US District Court for the Northern District of California against Google.

This latest antitrust lawsuit concerns Google’s policy of forcing Google Play app developers to pay a 30 percent commission fee on sales made through the app.

Antitrust allegations

It comes after Google recently expanded this commission fee to include more digital goods purchased on the Play Store.

This resulted in a number of prominent apps, that have previously been excluded from paying the commission fee, being subjected to the fee.

The lawsuit alleges that ever since Google acquired the Android operating system in 2005, it had repeatedly promised Android would be the basis for an open ecosystem, in which industry participants could freely compete.

The US states allege Google has not kept its word and has taken steps to close the ecosystem from competition and insert itself as the middleman between app developers and consumers.

The States allege that in order to maintain its “extravagant” 30 percent commission, Google employed anticompetitive tactics to diminish and dis-incentivize competition in Android app distribution.

Google response

But Google has hit back at the lawsuit in a blog post, stating the lawsuit was a strange decision.

“We built Android to create more choices in mobile technology,” wrote Google. “Today, anyone, including our competitors, can customise and build devices with the Android operating system – for free.”

“We also built an app store, Google Play, that helps people download apps on their devices,” it said. “If you don’t find the app you’re looking for in Google Play, you can choose to download the app from a rival app store or directly from a developer’s website. We don’t impose the same restrictions as other mobile operating systems do.”

“So it’s strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others,” Google wrote. “This complaint mimics a similarly meritless lawsuit filed by the large app developer Epic Games, which has benefitted from Android’s openness by distributing its Fortnite app outside of Google Play.”

Epic Games

In August last year Epic Games sued both Apple and Google, after they had removed the game Fortnite from its app store over a dispute, which revolves around app store charges that Epic has argued are unfair.

The main focus of the Epic Games lawsuit however has been against Apple, and Google was thought to be largely safe from legal action over App store fees, as it does not require Google Play as the sole source of software on the phone (unlike Apple).

Google has recently joined a move made by Apple in lowering its fee to 15 percent for smaller developers – a move widely seen as a response to mounting public pressure.

The US Justice Department, along with some states, sued Google last October for abusing its dominance in search advertising.

In December 10 US states, led by Texas, sued Google over anti-competitive behaviour in its network advertising operations, including alleged collusion with Facebook.

In total Google is facing three federal antitrust lawsuits, including the DoJ lawsuit.