37 US States sue Google over extravagant Play Store commission

In a significant development 37 U.S. state and district attorneys general have sued Alphabet Inc’s Google alleging that the search engine giant’s search and advertising policies violates antitrust law. The lawsuit, one of a series that has been filed against Google in the United States, comes in the wakes of complaints from app developers regarding Google’s management of its Play Store.

Google did not immediately respond to requests for comments.

Google requires that some apps use the company’s payment tools and give Google as much as 30% of digital goods sales.

“To collect and maintain this extravagant commission, Google has employed anticompetitive tactics to diminish and disincentivize competition in Android app distribution,” states the lawsuit. “Google has not only targeted potentially competing app stores, but also has ensured that app developers themselves have no reasonable choice but to distribute their apps through the Google Play Store”.

In September 2020, Google had said it would ramp up enforcement of its policies, drawing criticism from app developers. Google’s Play Store is far more widely used than similar products from Amazon.com Inc, Samsung Electronics Co Ltd, Huawei Technologies Co Ltd and others.

The lawsuit had drawn praise from Meghan DiMuzio, executive director for the Coalition for App Fairness, which represents companies including Match Group Inc and Spotify Technology SA that oppose some of the Play Store rules.

“Anti-competitive policies stifle innovation, inhibit consumer freedom, inflate costs, and limit transparent communication between developers and their customers,” said DiMuzio.

Google’s restrictions on its PlayStore are similar to those of Apple Inc’s App Store for iPhones and iPads. While Google does enable consumers to avoid the Play Store, critics opine say it is not practical to do so.

Google and Apple have drawn legal scrutiny.

Last year, video game maker Epic Games Inc had filed separate lawsuits against Google and Apple in federal court in California over their app store policies. Proposed classes of developers and consumers have joined the cases. A decision by a judge is expected in the coming weeks; a hearing on Google’s effort to dismiss the case against it is scheduled for hearing on July 22.

The states’ lawsuit is headed by a group including attorneys general of Utah, New York, North Carolina and Tennessee, and joined by others including California and the District of Columbia.

Google faces a host of lawsuits, including from federal antitrust lawyers from the Justice Department as well as from two separate groups of attorneys generals with one led by Texas which focuses on its advertising policies while the other targets Google’s alleged efforts to extend its dominance in search to newer markets, like voice assistants.

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