Monday, September 18, 2023
Courthouse News Service
Monday, September 18, 2023 | Back issues
Courthouse News Service Courthouse News Service

States, Google reach tentative deal to settle Google Play monopoly suit

The states and Google have asked a federal judge to vacate the trial set for November.

SAN FRANCISCO (CN) — Google, New York Attorney General Letitia James and a bipartisan coalition of attorneys general from all 50 states, plus the District of Columbia and Puerto Rico, have reached a tentative agreement to settle one of the three major antitrust lawsuits against Google.

In July 2021, James and the attorneys general of Utah, North Carolina and Tennessee sued Google claiming that the company used monopoly powers to favor its own apps over rival apps in the Google Play store on Android devices. Google’s conduct was an abuse of power intended to inflate the prices of paid apps and in-app purchases, the states claim.

No company is too big to play by the rules, including Google. We brought this lawsuit because it is illegal to use monopoly power to drive up prices," the states said in a statement Wednesday. "We appreciate this bipartisan group of attorneys general who fought for a fair marketplace that encourages competition, innovation, and lower prices for consumers. We look forward to finalizing this agreement and sharing more details in the next 30 days.”

The parties asked a federal judge to vacate a trial set to begin Nov. 6. If the court does not approve the settlement or the settlement is terminated for any reason, the parties will be returned to their respective litigation positions and will meet and discuss any needed adjustments for the respective cases. 

“In light of the settlement in principle, further litigation among the settling parties would waste judicial and party (including public) resources, could interfere with finalization of the settlement, and would create substantial uncertainty for all parties regarding which parties will participate in the trial,” the settlement says.

In the original complaint, the states said consumers had to pay a 30% commission to Google due to its fee structure for outside developers. Most Android devices do not allow competing app stores and Google had attacked competing app stores in the past.

“Google has violated the trust of Android phone customers by limiting consumer choice and raking in outrageous commissions on app developers,” California Attorney General Rob Bonta in a 2021 statement announcing the lawsuit. “Android customers are effectively stuck using the Google Play Store for apps, where they pay a premium.”

The Google Play store has a 90% share of the market in terms of app distribution on Android phones, according to the complaint. No other service has a market share over 5%. This was despite Google’s promises that Android would be the basis for an “open” ecosystem, according to the complaint.

“Google has taken steps to close the ecosystem from competition and insert itself as the middleman between app developers and consumers,” the states say in the complaint. “Unbeknownst to most consumers who own a mobile device running Android, every time they purchase an app from the Google Play Store, or purchase digital content or subscriptions within an app, up to 30% of the money they pay goes to Google.”

Google still faces two lawsuits related to its app store. In one, Epic Games claims Google’s Play Store contains uncompetitive restraints and unlawful monopolization. Epic claims that Google prohibits the direct distribution of apps and that all apps must be installed through the Play Store instead.

In the second suit, Match Group, a former partner of Google, claims that Google illegally monopolizes the market for distributing apps by conditioning app availability on Google Play with exclusive use of its own in-app payment processing product, Google Play Billing, which charges supra-competitive prices. 

Categories / Consumers, Courts, Financial, Technology

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.