The newest installment of antitrust allegations against major tech companies in the U.S. came Wednesday, July 7th, as dozens of states plus the District of Columbia sued Google over alleged unfair marketing practices.
This lawsuit is the most recent in a string of similar worldwide allegations against Google, as well as Apple. Many developers and organizations, big and small, claim these two behemoths have a stranglehold over the mobile app store market.
Google v. Utah Lawsuit
Wednesday, 36 states and Washington D.C. filed a lawsuit against Alphabet Inc.’s Google. Led by Utah, North Carolina, New York and Tennessee, this 144-page complaint is the fourth in a series of state or federal antitrust lawsuits to be brought against the Mountain View giant since October of 2020.
“30% of the money they [Android Consumers] pay goes to Google. 4. To collect and maintain this extravagant commission, Google has employed anticompetitive tactics to diminish and disincentivize competition in Android app distribution.”
- Utah v. Google (Case 3:21-cv-05227) p. 9
According to the allegations, these anticompetitive tactics include:
- Erecting barriers that deter consumers from directly downloading and installing competing apps or app stores.
- Disincentivizing and discouraging competition from market participants that could avoid technological restrictions.
- Attempting to buy off competitors, like Samsung, to limit competition from alternative app stores.
- Devising incentive programs to share monopoly profits with large app developers that could disrupt Google’s monopoly.
- Mandating that consumers who download apps from the Google Play Store must use Google Play Billing for all in-app purchases.
Additionally, Google has come under fire for the same “egregious” 30 percent commission fees imposed on developers that Apple has been under scrutiny for. Both companies offer a reduced fee for smaller developers, 15 percent for under $1 million USD annual revenue. Google offers this lower fee to all companies for their first million, while Apple restricts it to smaller companies who make under $1 million in total.
Google’s rebuttal to this complaint came in a blog post from Wilson White, senior director of public policy. White writes:
"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 [...] This lawsuit isn’t about helping the little guy or protecting consumers. It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it."
While the “others” mentioned is clearly a dig at Apple, there is evidence to suggest that the Cupertino tech company will be the target of further litigation in the U.S., particularly from the Justice Department. It is unknown if these complaints will lead to any significant regulatory action from the FTC.
Around the World
The United States is far from the only nation stepping in to curtail the unprecedented market domination by large U.S. tech companies. Recently, Germany, Japan, and the U.K. announced investigations into what they claim to be unfair market practices.
Germany’s Federal Cartel Office, Bundeskartellamt, began investigation into the world’s leading tech companies — Google, Apple, Facebook, and Amazon — following updated competition laws. Similarly, the Japanese government formed a panel to conduct another antitrust probe into Apple and Google. Additionally, following the formation of a new Digital Markets Unit, the United Kingdom’s Competition and Markets Authority (CMA) announced a market study into Apple and Google’s mobile market domination.
This week Australia joined in the fight concerning Epic Games’ ongoing battle against Apple. The Australian Federal Court voted to press forward with the Epic - Apple lawsuit, overturning an earlier decision to put a hold on the case. This follows the conclusion of Epic Games v. Apple U.S. trial in May.
An Epic spokesperson said:
“We look forward to continuing our fight for increased competition in app distribution and payment processing in Australia and around the world."
While Apple has been dominating the news in recent months for lawsuits concerning what has been called anticompetitive behavior, Google recently became the subject of an extensive complaint filed in Northern California by three-dozen U.S. states. Google is no stranger to accusations of monopolistic practices, and only time will tell what the consequences will be for Google and Apple.
Worldwide investigation into market domination in the mobile space is underway, and some countries, like Russia, have already successfully fined these major companies. Whether there will be significant regulations imposed on the U.S. tech giants, however, is still unclear.