Google saw Samsung app store and Fortnite as ‘virus to be eliminated’, huge new lawsuit claims

The lawsuit alleges anticompetitive behaviour between the search giant and rival companies

Adam Smith
Thursday 08 July 2021 11:33 BST
Google-Antitrust Lawsuit
Google-Antitrust Lawsuit (Copyright 2018 The Associated Press. All rights reserved.)

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Louise Thomas

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Google has been accused of illegal, anticompetitive behaviour around its Play Store in a major new lawsuit filed by attorneys general for 36 states and the District of Columbia.

The 144-page complaint, filed late Wednesday in a Northern California federal court, is the fourth major antitrust lawsuit filed against Google by United States government agencies since October 2020.

One of the complaints alleges that Google paid Samsung, the largest Android manufacturer, in order to ensure that it did not develop its competing Galaxy Store. Similarly, following Epic Games’ decision to distribute Fortnite outside of the Play Store ahead of the infamous trial between the game developer and Apple, Google allegedly tried to dissuade developers from doing the same - describing it internally as “a virus to be eliminated”.

“Any app that is fulfilled by this platform would be subject to Google Play’s terms and policies and all Store Service user interfaces would be co-branded with Google Play. If adopted, this proposal would make the Samsung Galaxy Store essentially a white label for Google’s app distribution services, eliminating a nascent competitor”, the suit describes.

Google retaliated against the lawsuit in a blog post: “Google Play … helps people download apps on their devices”, the search giant wrote. “If you don’t find the app you’re looking for in Google Play, you can choose to download the app from a rival app store or directly from a developer’s website. We don’t impose the same restrictions as other mobile operating systems do.”

Google argues that the lawsuit ignores the competition it faces from Apple, that many Android smartphone manufacturers ship devices with more than one app store pre-installed, and that customers can sideload apps directly from the developer. “Popular Android devices such as the Amazon Fire tablet come preloaded with a competitive app store and no Google Play Store”, Google also writes – although as of March 2017 the Google Play Store had approximately 2,800,000 apps, compared to 600,000 in the Amazon App Store, and that number has likely risen far more for Google than it has for Amazon.

Users in the United States, United Kingdom and abroad have seen the results of Google power on Android users with Huawei, which has been forbidden to use Google’s services in the wake of an executive order from the Trump administration. While Huawei has its own developing app store (the AppGallery), the company’s market share has declined nearly 60 per cent in Europe.

Recent research, commissioned by Facebook, also showed that the Google Play Store is the most pre-installed and downloadable app in the United States, with the majority of its own services remaining the most used apps on Android devices – the same position Apple finds itself in on its iPhones and iPads.

The lawsuit also comes against a backdrop of proposed laws in Congress tailored to either break up or undermine the power amassed by Google, Apple, Facebook and Amazon.

The four have built trillion-dollar empires fueled by the immense popularity of services that people have become increasingly dependent upon. Much of the latest lawsuit echoes similar allegations that mobile game maker Epic Games made against both Google and Apple, which runs a separate app store exclusively for iPhones, in cases brought last August.

Just as Epic did, the states’ lawsuit focuses primarily on the control Google exerts on its app store so it can collect commissions of up to 30 per cent on digital transactions within apps installed on smartphones running on Android. Those devices represent more than 80 per cent of the worldwide smartphone market.

A high-profile trial pitting Epic — the maker of the widely played Fortnite video game — against Apple concluded in late May. A decision from the federal judge who presided over the month-long proceedings is expected later this summer. Epic’s lawsuit against Google is still awaiting trial.

Although its app commissions are similar to Apple’s, Google has tried to distinguish itself by allowing consumers to download apps from other places than its Play store. Apple, in contrast, doesn’t allow iPhone users to install apps from any other outlet than its store. But the lawsuit filed Wednesday alleges Google‘s claims that its Android software is an open operating system that allows consumers more choices is a sham.

The complaint contends Google has deployed various tactics and set up anticompetitive barriers to ensure it distributes more than 90 per cent of the apps on Android devices — a market share that the attorneys general argue represents an illegal monopoly. What’s more, the lawsuit alleges Google has been abusing that power to reap billions of dollars in profit at the expense of consumers who wind up paying higher prices to subsidize the commissions, and the makers of apps who have less money and incentive to innovate.

"Google‘s monopoly is a menace to the marketplace," said Utah Attorney General Sean Reyes, who is leading the lawsuit along with his peers in New York, Tennessee and North Carolina. "Google Play is not fair play. Google must be held accountable for harming small businesses and consumers."

The Mountain View, California, company also is fighting the three other lawsuits that were filed against it last year, including a landmark case brought by the U.S. Justice Department. Those cases are focused on alleged abuses of Google‘s dominant search engine and its digital ad network that generates more than $100 billion in annual revenue for its corporate parent, Alphabet Inc.

As the scrutiny on their app stores has intensified, both Apple and Google have been taking conciliatory steps.

Most notably, both have lowered their commissions to 15 per cent on the first $1 million in revenue collected by app makers — a reduction that covers most apps in their respective stores. But those measures haven’t lessened the heat on any of the major tech companies, nor should they, said Sen. Amy Klobuchar, a Democrat from Minnesota, who chairs a subcommittee that oversees antitrust issues.

"This is exactly the type of aggressive antitrust enforcement that we need to rein in the power of big tech and address America’s monopoly problem," she said in a statement.

Additional reporting by Associated Press

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