Virginia is one of 37 states suing Google for alleged anti-competitive and unfair business practices, Attorney General Mark Herring announced Wednesday.
“Google has really become a major player in the tech market, so much so that its products play a role in almost every aspect of Virginians’ daily lives, including their cell phones and the apps that they use on a regular basis,” Herring said in a press release. “Because of this market dominance, Google has allegedly been able to tightly control app distribution – and the loss of competition here has cost Virginians hundreds if not thousands of dollars more than necessary when they buy phone apps and make in-app purchases on the apps they use.”
The complaint argues that Google shut out competing app distribution channels, forcing app developers to use the Google Play Store and Google Billing, tied to a required commission paid to Google of up to 30 percent. It notes that cell phones are “essential tools in contemporary American life.”
Consumers have to pay the higher price to use apps since they can’t find the apps anywhere else.
“Unbeknownst to most consumers who own a mobile device running Android, every time they purchase an app from the Google Play Store, or purchase digital content or subscriptions within an app, up to 30 percent of the money they pay goes to Google,” the complaint states. “To collect and maintain this extravagant commission, Google has employed anti-competitive tactics to diminish and disincentivize competition in Android app distribution.”
In 2020, Google announced that it would begin requiring app developers to use Google Billing, effective September 2021. Ars Technica reported at the time that the move seemed targeted at streaming services like Netflix and Spotify, who used their own in-house billing to dodge the 30-percent fee.
The lawsuit states, “Google has steadily expanded its illegal tie: effective September 2021, subscription streaming services for music and video — which Google previously exempted — must either submit to Google’s tie or deny consumers the ability to purchase subscriptions from their Android apps. Google’s comparable streaming services will gain an enormous competitive advantage.”
Google says the lawsuit “ignores choice on Android and Google Play.” The company argues that Android users can use other app stores, and that Google faces competition from other mobile platforms.
“This completely ignores the competition we face from other platforms such as Apple’s incredibly successful app store, which accounts for the majority of mobile app store revenues according to third-party estimates. We compete for both developers and consumers, and if we’re not providing them with the best experience on Google Play, they have other alternatives to choose from,” a Wednesday Google press release states.
“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 a source outside Google’s Play Store, effectively foreclosing app developers and app stores from direct distribution to consumers,” Herring’s press release states.
The lawsuit is the second launched against Google in the past year by a majority of the states. In December, Herring announced that Virginia had joined 37 other states suing Google for anticompetitive conduct. That lawsuit was focused on Google’s power as a search engine and advertising provider.
“As attorney general, I take my obligation to protect Virginia consumers and maintain competitive markets seriously, and that means making sure that massively influential companies like Google act fairly and comply with the law,” Herring said in his Wednesday release.
Google’s response states, “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.”
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Eric Burk is a reporter at The Virginia Star and the Star News Network. Email tips to [email protected].
