WASHINGTON, D.C. – Today, Attorney General Karl Racine and 36 other attorneys general filed a new antitrust lawsuit against Google, alleging that the company used its dominance to unfairly restrict competition with the Google Play Store for Android mobile devices and forced app developers to use its payment processor, Google Billing, as a middleman for in-app purchases.
The coalition alleges that Google’s exclusionary conduct related to the Google Play Store and Google Billing harmed consumers by limiting choices and driving up app prices. The lawsuit also alleges that Google misrepresented security risks of apps distributed outside of the Play Store to keep consumers using its own app store and paying its higher prices—including its commission of up to 30%. The attorneys general are seeking a range of remedies that would end Google’s anticompetitive behavior and provide restitution for consumers.
“Google is using its dominant position in the marketplace to stifle competition and extract billions of dollars in commissions on in-app purchases from unsuspecting consumers—and this anticompetitive behavior must stop,” said AG Racine. “Not only has Google acted unlawfully to block potential rivals from competing with its Google Play Store, it has profited by improperly locking app developers and consumers into its own payment processing system and then charging high fees. My office will not allow Google or any other company to harm District residents. We have fought, and will continue to fight, big tech companies that abandon the principles of fair competition that originally enabled their success and who instead profit by illegally maintaining a monopoly position.”
Google, LLC is a multinational technology company specializing in search, cloud computing, and other Internet-based services and products. It developed the Android operating system (Android OS) for mobile devices and operates the Google Play Store, an app distribution market. It also operates Google Billing, a payment processor that requires app developers to use if they sell apps through the Play Store. Android is the leading mobile operating system globally with an estimated 2.5 billion users, and Android devices are used by an estimated 38% of American mobile users.
When Google launched its Android OS, it originally marketed it as an “open source” platform, which would allow app developers and device manufacturers to create and distribute compatible apps without unnecessary restrictions. By promising to keep Android open, Google successfully enticed mobile device manufacturers and mobile network operators to adopt Android, and to forgo competing with the Google Play Store. Later, when a critical mass of device manufacturers, like Samsung, and network providers, like Verizon, had adopted Android OS, Google closed the ecosystem to competition through restrictive contracts with manufacturers and providers and other restraints.
The lawsuit alleges that Google works to discourage or prevent competition, violating federal and state antitrust laws and consumer protection laws, and harming consumers. Specifically, the coalition alleges that Google protects its monopoly power over Android app distribution by:
- Imposing barriers that stop app distribution outside of the Google Play store: Google imposes technical barriers that strongly discourage or effectively prevent third-party app developers from distributing apps outside the Google Play Store. Google builds into Android a series of security warnings (regardless of actual security risk) and other barriers that discourage users from downloading apps from any source outside Google’s Play Store, effectively stopping app developers and app stores from direct distribution to consumers.
- Failing to keep Android “open source” despite its promises: Google has not allowed Android to be “open source” for many years, effectively cutting off potential competition. Google forces manufacturers that wish to sell devices that run Android to enter into agreements called “Android Compatibility Commitments.” Under these “take it or leave it” agreements, manufacturers must promise not to create or implement any variants or versions of Android that deviate from the Google-certified version of Android.
- Forcing Google apps to come pre-loaded on Android devices: Google’s contracts with device manufacturers and network providers prevent competition by forcing Google’s proprietary apps to be “pre-loaded” on essentially all devices designed to run on the Android OS, and requires that Google’s apps be given the most prominent placement on device home screens.
- Buying off potential competitors: Google has successfully persuaded device manufacturers and wireless network providers not to compete with Google’s Play Store by buying them off. Essentially, Google has entered arrangements that reward these entities for not competing with a share of Google’s monopoly profits.
- Forcing app developers and consumers to use Google’s alike to use Google’s payment processing service: Google forces developers who offer their apps through the Google Play Store to use Google Play Billing as a middleman for in-app purchases. This arrangement improperly ties payment processing—a separate service—to an app distribution platform. It also means that consumers are forced to pay Google’s commission—up to 30%—on in-app purchases of digital content in any apps that are distributed via the Google Play Store.
With this lawsuit, the coalition is seeking remedies including recovery for consumers, disgorgement of unjust profits from Google’s unlawful conduct as described in the complaint, injunctive relief, civil penalties, divestiture, removal of certain contract terms, and a neutral monitor to ensure compliance.
This effort is led by the attorneys general of Utah, Arizona, Colorado, Iowa, Nebraska, New York, North Carolina, and Tennessee. In addition to the District of Columbia, states joining the lawsuit include: Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Idaho, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and West Virginia.
The complaint, filed in California, is available here.
Background on OAG’s Antitrust Enforcement Actions
OAG has a long record of holding companies accountable for antitrust violations. In May 2021, OAG filed a lawsuit against Amazon alleging that the company is fixing online retail prices through contract provisions that prevent third-party sellers to offer their products on other platforms. OAG also joined a coalition of attorneys general in filing a lawsuit against Facebook Inc. in December 2020, alleging that the company has engaged in a pattern of illegal acquisitions and exclusionary conduct to stifle competition and maintain its overwhelming market dominance. In addition, OAG also joined a multistate group of attorneys general in suing Google, Inc. in December 2020 for exclusionary conduct to maintain or establish its dominance in several product markets. And OAG sued Facebook over the Cambridge Analytica scandal.
As for other industries, OAG joined in multistate settlements with several banks, including Deutsche Bank, Barclays, and UBS, worth hundreds of millions of dollars, for fraudulent and anticompetitive conduct during the 2007-2008 financial crisis and its aftermath. OAG is actively litigating antitrust cases in the pharmaceutical industry, including a multistate antitrust lawsuit against the manufacturers of Suboxone, a prescription drug used to treat opioid addiction, for engaging in an anticompetitive scheme to block generic competition for Suboxone. OAG is also litigating multistate lawsuits against several manufacturers of generic drugs for allegedly conspiring to fix drug prices, thwart competition, and engage in illegal and anticompetitive trade practices with regard to more than 40 drugs. Additionally, OAG has opposed anti-competitive mergers such as those between T-Mobile and Sprint, Anthem-Cigna and Aetna-Humana, Staples and Office Depot, Sysco and U.S. Foods, and Fantasy sports sites DraftKings and FanDuel.