FRANKFORT, Ky. (CNN/WTVQ) – Dozens of states have filed an antitrust lawsuit against Google that zeroes in on its app store practices.
“Our lawsuit alleges that Google’s anticompetitive business practices violated state and federal antitrust laws, causing direct harm to Kentucky consumers,” added Kentucky Attorney General Daniel Cameron. “Illegal and anticompetitive practices by a dominant company, such as Google, hurt Kentucky consumers and Kentucky businesses operating in the marketplace. Our bipartisan coalition of attorneys general from across the country has joined together to stop these practices from continuing.”
According to the lawsuit, the heart of the case centers on Google’s alleged exclusionary conduct, which substantially shuts out competing app distribution channels, Cameron’s office said in a statement. That conduct, which is aimed at enhancing and protecting Google’s monopoly position over Android app distribution, includes the following:
- Google imposes technical barriers that strongly discourage or effectively prevent third-party app developers from distributing apps outside the Google Play Store. Google builds into Android a series of security warnings (regardless of actual security risk) and other barriers that discourage users from downloading apps from any source outside Google’s Play Store, effectively foreclosing app developers and app stores from direct distribution to consumers.
- Google forces original equipment manufacturers (OEMs) that wish to sell devices that run Android to enter into agreements whereby OEMs must promise not to create or implement any variants or versions of Android that deviate from the Google-certified version of Android.
- Google’s required contracts foreclose competition by forcing Google’s proprietary apps to be “pre-loaded” on essentially all devices designed to run on the Android operating system and requires that Google’s apps be given the most prominent placement on device home screens.
- Google “buys off” its potential competition in the market for app distribution. Google has successfully persuaded OEMs and mobile network operators (MNOs) not to compete with Google’s Play Store by entering into arrangements that reward OEMs and MNOs with a share of Google’s monopoly profits.
Google also forces app developers and app users alike to use Google’s payment processing service, Google Play Billing, to process payments for in-app purchases of content consumed within the app.
This arrangement, which unlawfully ties a payment processing system to an app distribution channel, forces app consumers to pay Google’s commission — up to 30% — on in-app purchases of digital content made by consumers through apps that are distributed via the Google Play Store, Cameron said, noting the commission is higher than payment processing fees charged in competitive markets.
The lawsuit is led by Utah, New York, North Carolina, and Tennessee. Attorney General Cameron joined the lawsuit alongside Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Indiana, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, Virginia, Washington, and West Virginia.