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Android app developers sue Google over Play Store monopoly

Read time 4min 20sec

Internet search giant Google’s legal woes targeting its Android Play Store are growing.

Barely a week after Epic Games, a US-based video game and software developer, sued Google and Apple in a federal anti-trust lawsuit, a new class-action lawsuit accuses Google’s Play Store of illegal activity that harms Android app developers.

An Android app developer has sued Google for alleged anti-competitive and unlawful practices related to its Google Play app store, and Hagens Berman attorneys says its behaviour – which gives rise to Android developers having to pay it exorbitant fees – constitutes violation of federal anti-trust laws.

The proposed national class-action lawsuit spotlights Google’s “ongoing abuse of its market power, including the exclusion of competition, the stifling of innovation, the inhibition of consumer choice, and Google’s imposition on app developers of a supracompetitive 30% transaction fee,” in Google Play, its marketplace for Android OS apps, the attorneys allege.

Epic battle

In the earlier case, last week Thursday Apple removed video game Fortnite from its App Store, and Google followed suit, pulling the game from its Google Play Store some hours later.

This after Epic Game’s recent decision to let players directly purchase V-Bucks in Fortnite, thereby circumventing Apple and Google’s own payment processing and their 30% cut.

In response, the video game developer sued the tech giants in US court arguing they were looking to block competition and stifle innovation in their app stores.

The new Google suit alleges that unnaturally high fees for payment processing also attach to the sale of digital products made in-app, such as consumables in games, as well as to certain subscriptions sold in-app.

Under these practices, it notes, if an app sold in Google Play or a digital product sold in a Google Play app costs $1.99, then Google, with its default fee, takes nearly $0.60.

The attorneys say Google, in an improper exercise of its overwhelming market power, extracts more money from developers than they should have to pay for the distribution of Android OS apps and add-ons sold via in-app purchase.

“This high fee artificially raises the price of the products sold there,” the suit states. “But for Google’s exclusionary behaviour, the Android app market would have more, and more meaningful and effective, competition.”

The suit was filed in the US District Court for the Northern District of California on 17 August, and states Google – which is no stranger to anti-trust lawsuits – has engaged in rampant anti-trust behaviour, including anti-competitive contracts, strategic abuses of its dominance in other Android apps, the exploitation of deficits in consumer knowledge, and the cultivation and exploitation of malware fears to promote the Play Store.

Hagens Berman says Google’s abuse of its power regarding Google Play is part of the behaviour that led Europe to fine Google a record fine of about $5.1 billion.

The lawsuit states Google has improperly attained and maintained a monopoly in the market for Android OS distribution services and in-app product payment processing services.

“For years, Google has gotten away with widespread anti-competitive practices that hold app developers hostage and rob them of profits they would otherwise receive for their work product,” says Steve Berman, managing partner and co-founder of Hagens Berman.

“We have taken on Google and Apple for what we believe to be improper and unlawful behaviour that harms app developers, and for consumers, we have filed suit against Amazon as to its monopolistic behaviour that has driven up the cost of essential goods during the COVID-19 pandemic. Hagens Berman is at the forefront of taking on big tech monopolies,” Berman notes.

Stifling competition

According to the lawsuit filed this week against Google, the tech giant has bundled its app store with other must-have apps, leading to Google Play being pre-installed on tens of millions of devices every year.

It alleges that Google bans the distribution of other Android app-sale clients in Google Play, a move attorneys say is nothing but anti-competitive in its purpose.

Through these and other measures, the suit says, Google uses its power to stifle competition to the detriment of Android app developers.

“Its overbearing contracts and practices steal oxygen even from well-resourced competitors such as Amazon, robbing the marketplace of innovative means of distributing apps at lower costs to developers,” the lawsuit reads.

The lawsuit seeks to recoup losses suffered by Android app developers for the monetary injuries they have suffered due to Google’s anti-competitive monopoly in the distribution and payment processing the plaintiff has identified.

The suit also seeks treble damages and injunctive relief against Google for its violation of federal anti-trust laws.

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