Google Sued For Antitrust Violations Over Google Play Store

On Friday in the Northern District of California, plaintiffs Dianne Bentley, Jennifer Grace, Adan Moya, Coresa Trimble, and Robert Wing filed a class-action complaint against Google for antitrust violations involving its alleged monopoly via the Google Play Store, claiming that it is the only way Android users can purchase apps or make in-app purchases.

The plaintiffs averred that “[t]hrough its acquisition and maintenance of an unlawful monopoly, and its anticompetitive contractual restrictions imposed on app developers, Google has forced consumers to pay supra-competitive prices for app and in-app purchases on the Google Play Store.”

The plaintiffs asserted that “Google’s monopolization of…the Android App Store Market and the Android In-App Payment Processing Mark” was in part accomplished by “Google’s domination and control of the Android operating system of the related market for licensable smart mobile operating systems.” The plaintiffs claimed that Google has a monopoly on this market because Original Equipment Manufacturers (OEMs) can allegedly only use the licensed Android operating system, since most do not make their own operating system. As a result, Google’s operating system is widely used by OEMs and consumers, therefore, app developers develop apps to be compatible with the Android operating system. Meanwhile, the plaintiffs asserted that “Google uses its Android OS to keep its ecosystem closed to any competition.” Consequently, the plaintiffs claimed that Google has positioned itself to be the choice for OEMS, app developers, and consumers.

The plaintiffs asserted that Google “unlawfully maintains a monopoly in the Android App Store Market,” which is purportedly dominated by the Google Play Store. However, the Google Play Store “is not downloadable and therefore needs to be pre-installed by OEMs so that users have access to it” and “[a]pp developers cannot distribute alternative apps via the Play Store.” As a result, an Android user can only purchase and download an app or make in-app purchases through the Google Play Store. The plaintiffs averred that Google engaged in anticompetitive behavior and restricted competition in order to gain and maintain its “monopoly power in the Android App Stores Market.” As a result, Google’s “monopoly power is evidenced by its market share, the absence of countervailing buying power, and the existence of high barriers to entry and expansion.” The plaintiffs also pointed to the fact that the Apple App Store and the Google Play Store do not compete with each other because they use different operating systems and Apple’s operating system and app store is only available on Apple devices. The plaintiffs claimed that Google has more than 90 percent of the Android App Stores market and Google had 2.7 million apps available on the Google Play Store, “whereas the next four closest competitors[’] number of apps do not even add up to the total…amount of available apps on Google Play.” According to the plaintiffs “Google imposes a supracompetitive commission of 30% on the price of apps, and in-app products or services, purchased through the Google Play Store.”

Some of Google’s purported anticompetitive conduct in the Android App Store Market includes its contracts with OEMS, which for instance imposes restrictions by “crippling other app stores by requiring OEMs to give preferential location to the Play Store and other Google apps on the device’s home screen” and “requiring OEMs to accept a bundle of apps and services that include the Google Play Store.” According to the plaintiffs, Google’s requirements also “limit OEMs’ ability to compete with each other on price and quality of distribution platforms for mobile apps.” The Android licensing agreement also allegedly imposes restrictions on OEMs.

Google also imposes restrictions on app developers, whereby “Google prohibits any app developer that wants to distribute its apps through the Google Play Store from also distributing any competing app store through the Play Store.” Google also limits advertising if an app developer does not list their app in the Google Play Store. Google also allegedly engages in similar monopolistic behavior in the Android In-App Payment Processing Market. For example, Google prevents app developers from “integrat[ing] compatible payment processors into their apps to facilitate the purchase of in-app digital content.” According to the complaint, Google also charges a high commission rate for its in-app purchasing payment system and tools. Google ties the Google Play store and Google Play Billing, forcing app developers to use both.

Google’s purported conduct harms consumers, restricts how consumers can access apps and drives prices higher. The plaintiffs alleged that they have suffered antitrust injury from Google’s aforementioned conduct, which has purportedly restricted and impaired competition causing consumers to be charged supracompetitive prices. Google is accused of violating the Sherman Act for unlawful monopoly and/or maintenance of monopoly, and unlawful restraints of trade. Google also allegedly violated numerous states’ antitrust, competition, consumer protection, or trade acts.

The plaintiffs, who brought the action on behalf of themselves and other consumers, have sought class certification and to appoint the plaintiffs and their counsel to represent the class; to preliminarily and permanently enjoin the defendants from further unlawful conduct; declaratory judgment; an award for damages, including treble damages; an award for costs and fees; and other relief.

The plaintiffs are represented by Milberg Phillips Grossman LLP.