U.S. antitrust law enforcement have mounted their first challenge to a mobile app store, accusing Google of overclocking developers who sell through the Play store that is integrated into their Android operating system.
The lawsuit, filed Wednesday in San Francisco federal court, is the fourth against the U.S. search giant in less than a year and the first to take smartphone platforms to the center of consumer technology today.
So far, Google has received less public criticism than Apple for the fees it imposes on mobile app developers, with restrictions preventing developers from dismissing the fees. Apple’s App Store has been the subject of a high profile private antitrust case by Epic Games.
The case, led by Utah and included 35 other U.S. and District of Columbia, accused Google of “illegal restriction of trade and maintenance of monopolies” in the market for the distribution of Android applications, as well as the market for paid Android applications.
Google has denied the allegations, calling it “incorrect” that Android developers and users are forced to use the Play Store. He also indirectly attacked Apple for its own more restrictive app store policies.
In a blog post late Wednesday Wilson White, Google’s senior director of public policy, called it “strange that a group of state attorneys general has chosen to file a lawsuit attacking a system that provides more openness and choice than others. “.
States could face an upward battle to convince a court that the search giant has a dominant position in the way it sells mobile apps. Android accounts for only 46 percent of the U.S. smartphone market, compared to Apple’s 53 percent of iOS, according to StatCounter. The difficulty of proving market dominance is seen as one of the biggest obstacles to Epic’s case against Apple.
In a sign of the challenge that U.S. regulators will face in tackling technology giants under existing antitrust laws, the case against Facebook by the Federal Trade Commission it was dismissed by a U.S. judge last week in part because regulators failed to adequately define the market that the company would be expected to dominate. The EU has decided that it needs an ambitious new law, the Digital Markets Act, to break the power of dominant digital platforms including smartphone app stores.
To make their case, states claim that the Android smartphone platform is part of a market for freely licensed mobile operating systems, which excludes Apple’s iOS from the picture. Android accounts for 99 percent of this market, and Google has employed “anti-competitive tactics to decrease and discourage competition in Android app distribution,” allowing it to pay an “extravagant” commission of up to 30 percent. hundred, the complaint denounces.
Google has always argued that selling apps on Android is more open to competition from Apple’s rival iPhone platform because it allows rival app retailers next to its Play Store.
White also challenged the states ’attempt to draw a strict definition of the app market to make their case, saying it“ completely ignores the competition we’ve had from other platforms like the incredibly successful app store of Apple “.
Justifying their attempt to define Google’s operating system as virtually a market in itself, and not in direct competition with the iPhone, states state in their complaint: “Android is the only feasible operating system available under license from mobile device manufacturers who market and sell their devices to American consumers. ”
Google had taken advantage of this to illegally profit from its Play Store, they added, shutting down other Android app distribution channels and forcing developers to use the Play Store’s payment system, triggering automatic commissions.
Paul Gallant, Cowen’s analyst, said Paul Gallant, Cowen’s analyst, that the decision by the States to take over Google and not Apple probably reflects the fact that the investigation was more advanced, and that complaints against app of both U.S. companies and federal regulators. However, Google is more “developer-friendly” than Apple because it allows rival app stores and also allows Android users to side-load apps, or download them directly rather than through an app store, he added.
Utah Attorney General Sean Reyes said Google had used its “monopolistic power and hyper-dominant market position to illegally exploit billions of dollars added by smaller companies, competitors and consumers beyond what it should to be paid. “
In December nearly 40 attorneys general sued the company for a series of claims it had illegally abused its research monopoly. That is following a complaint brought by a smaller group of Republican states over the company’s advertising technology. Google also filed a complaint regarding the search by the Justice Department.
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