Dozens of U.S. States Sue Google Over Play Store's 'Extravagant Commission

By: Diane Bartz, Paresh Dave

Last Updated July 8, 2021 6:34 AM +07

4 minute read.

A 3D printed Google logo is seen in this illustration taken April 12, 2020.
REUTERS/Dado Ruvic/Illustration.

First appear from REUTERS. Read the original story here.

WASHINGTON/OAKLAND, Calif., July 7 (Reuters)

Thirty-seven U.S. state and district attorneys general sued Alphabet Inc's (GOOGL.O) Google on Wednesday, alleging that the search and advertising giant violates antitrust law in running its app store for Android phones.

The lawsuit, one of a series that has been filed against Google in the United States, follows complaints from app developers about the management of its Play Store.

Google did not have immediate comment on the new litigation.

Google requires that some apps use the company's payment tools and give Google as much as 30% of digital goods sales.

"To collect and maintain this extravagant commission, Google has employed anticompetitive tactics to diminish and disincentivize competition in Android app distribution," the lawsuit stated.

"Google has not only targeted potentially competing app stores, but also has ensured that app developers themselves have no reasonable choice but to distribute their apps through the Google Play Store," it added.

A sign is seen at the entrance to the Google retail store in the Chelsea neighborhood of New York City.
REUTERS/Shannon Stapleton

Google said last September it would ramp up enforcement of its policies, drawing criticism from app makers. Google's Play Store is far more widely used than similar products from Amazon.com Inc (AMZN.O), Samsung Electronics Co Ltd (005930.KS), Huawei Technologies Co Ltd [RIC:RIC:HWT.UL] and others.

The new lawsuit drew praise from Meghan DiMuzio, executive director for the Coalition for App Fairness, which represents companies including Match Group Inc (MTCH.O) and Spotify Technology SA (SPOT.N) that oppose some of the Play Store rules.

"Anti-competitive policies stifle innovation, inhibit consumer freedom, inflate costs, and limit transparent communication between developers and their customers," DiMuzio said.

Apple Inc's (AAPL.O) App Store for iPhones and iPads imposes similar restrictions to Play Store. Google does enable consumers to avoid the Play Store, but critics say it is not practical to do so.

Both companies have drawn legal scrutiny.

Video game maker Epic Games Inc sued Google and Apple separately in federal court in California last year over app store policies. Proposed classes of developers and consumers have joined the cases. A judge's decision in the Apple fight is expected in the coming weeks, and a hearing on Google's effort to dismiss the case against it is scheduled for July 22.

The states' lawsuit is headed by a group including attorneys general of Utah, New York, North Carolina and Tennessee, and joined by others including California and the District of Columbia.

Google already faces a federal antitrust lawsuit brought by the Justice Department last year and related lawsuits from two separate groups of attorneys general. One is led by Texas and focused on advertising while the other targets Google's alleged efforts to extend its dominance in search to newer markets, like voice assistants.

Reporting by Diane Bartz and Paresh Dave; Editing by Leslie Adler and Richard Pullin - REUTERS.