Google faces class action lawsuit over alleged app store price fixing

TLDR: The massive class action lawsuit against Google is one step closer to litigation. The lawsuit alleges that Google misled Play customers by warning them to use alternative app stores. The case is set for next summer.

Initially, 12 US states and five territories began antitrust lawsuits, including Alabama, Georgia, Hawaii, Illinois, Kansas, Maine, Michigan, Ohio, Pennsylvania, South Carolina, Wisconsin, Wyoming, American Samoa, Guam, Northern Mariana Islands, Puerto Rico , and the US Virgin Islands.

In 2021, attorneys general in those regions said the search giant used monopolistic power and fear to persuade customers to buy apps through Google Play at “artificially inflated” prices when they could get the same apps for less money elsewhere. The charges boil down to price fixing, where the company “maintains market conditions in such a way that the price is maintained at a given level by controlling supply and demand.”

These motions prompted legal groups from several clients with similar pending individual claims to merge with AG and petition for class action status.

Google filed a motion to dismiss the class action because not every plaintiff in individual lawsuits could necessarily prove harm. The company’s legal team argued that this would open the door for unharmed plaintiffs to join the class. However, the plaintiffs countered that they wanted the designation because Google’s actions caused “all” developers to inflate their prices.

On Monday, US District Court Judge James Donato rules that the inclusion of non-injured parties in the class action was irrelevant as to whether the action was designated as such.

“Essentially, Google requires each class member to individually prove an injury before certification can be issued,” Donato said. “The law provides otherwise. It is true that a class may not be certified if it is so excessive that it contains a significant number of uninjured people. Google hasn’t shown this to be a concern.”

Google, of course, was not happy with Donato’s decision. A representative told Reuters that the legal team would Considering his options.

Much of the legal controversy has centered on “lawyers'” opinions on app store pricing models. Plaintiff’s witness Hal Singer said that due to Google discouraging customers from using alternative stores, app makers raised prices on Google Play “across the board” to offset Google’s cuts. He concluded that app developers would lower their prices if Google reduced their fees.

Google expert Michelle Bertis countered, stating that Singer used methodologies to calculate “transfer rates” that were “out of the box” and that she had “never seen before”. She also pointed out that Singer was unable to provide real data to support how Google’s fees affected developer pricing decisions. He asked the court to exclude Singer’s testimony on those grounds.

Judge Donato said no.

“The court is “the gatekeeper, not the collector of facts,” Donato wrote. “The court will “exclude pseudoscience that does not meet the standards of reliability of Federal Evidence Rule 702 by making a preliminary finding that the expert’s testimony is reliable.” Any objection other than this is subject to cross-examination, not exclusion.”

In other words, the credibility and methodology of Singer’s testimony, or lack thereof, must be clarified in court through cross-examination. Donato can only rule out testimony if it is clearly false. He added that the fact that the Google witness had never seen the Singer methodology used before does not invalidate it.

“[It] it is not necessarily “surprising” that the expert opinions are based on new methods that have not been the subject of peer review,” the judge said.

Barring any delay, the first hearing in the case is scheduled for June 2023. If it wins in court, Google could receive up to $4.7 billion in damages.

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