Dozens of States Sue Google for App Store Fees

WASHINGTON — A group of 36 states and the District of Columbia sued Google on Wednesday, claiming its mobile app store abuses its market power, expanding legal challenges facing the internet search giant.

The lawsuit is the fourth state or federal antitrust lawsuit filed against Google since October, but the first to investigate the company’s lucrative App Store. It was filed in federal court in the Northern District of California. Utah, North Carolina, New York and Tennessee led suit.

Developers of mobile apps have taken issue with the way Google prompts them to use its system for certain payments inside its products. That system charges a 30 percent commission on top of multiple transactions, which developers say then forces them to charge higher prices for their services.

The complaint states, “Due to Google’s competitive behavior, the market share of the Google Play Store — which is over 90 percent — is not a credible threat, and market forces cannot pressure its overcompetitive commissions.” “

The lawsuit indicates that state and federal regulators are continuing to investigate Google’s empire of businesses for examples of monopolistic practices. For years, regulators decided not to act against Google, even as its businesses became more influential and rivals complained about how it was unfairly leveraging its power.

Many of the recent antitrust complaints against Google have focused primarily on search and advertising. The Justice Department sued the company last year on claims that it illegally protected its monopoly on online search advertising. A subsequent lawsuit by the state attorney general accused Google of abusing its power over ad technology, and he sued to squeeze smaller search services separately.

Google has argued that it allows other companies, such as Samsung and Fortnite maker Epic Games, to operate an app store for its Android software. In the complaint, the states stated that the Google Play Store was the source of more than 90 percent of all Android apps in the United States and that no other Android app store had more than 5 percent of the market.

Google did not respond to a request for comment. The lawsuit was first reported by Bloomberg.

The complaints join other cases against tech giants or investigate their practices. The Federal Trade Commission and a group of states both filed antitrust lawsuits against Facebook last year; A judge dismissed the complaints last month. The FTC is also investigating Amazon, and the Justice Department has asked questions about Apple’s business.

Apple, which operates other major app stores for smartphones, is also under scrutiny for deductions from developers for app sales and subscriptions. epic games filed an antitrust lawsuit against Apple Last year, it accused app makers of abusing their market power to unfairly charge high commissions. it is waiting decision on the matter next month.

As the amount of money flowing through Apple and Google’s markets has grown into the tens of billions annually, developers said companies were taxing too heavily for access. Since the software from both companies controls almost all the smartphones in the world, he said, developers have little choice but to follow their policies and pay fees.

Last year, Google has begun to crack On subscription-based app developers like Netflix and Spotify, who bypassed the company’s payment system to avoid paying fees in their Play Store. Google said at the time that it was providing clarity on what types of transactions need to be done using its payment system. The company said it would start forcing companies to integrate their payments with Google’s billing system in September 2021.

But as antitrust scrutiny began on the Google Play Store, the company said this year that it would cut store fees for developers from 30 percent to 15 percent on the first $1 million in revenue each year.

The lawsuit also puts pressure on how Apple runs its App Store. While Google’s Android smartphone operating system allows people to bypass the Play Store and add apps to their phones by other means, Apple’s mobile software does not. Effectively, this means that there is no option to put software on the iPhone without going through the App Store.

“App Store issues are clearly in the strike zone for Apple,” said Alex Herman, a competition policy advocate with Public Citizen, a group that has pushed for more aggressive antitrust enforcement against the tech giant.

Utah Attorney General Sean Reyes said in an interview that he was interested in the issues raised by Apple’s practices.

“Nothing in this lawsuit or this investigation prevents us from investigating or filing an investigation against any other entity,” Mr. Reyes said.

Apple did not immediately return a request for comment.

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