Attorney General James files second antitrust lawsuit in six months to end illegal Google monopolies

AG James co-leads the bipartisan coalition of 37 AG in Alleging Google
Illegally maintains App Store monopolies, unfairly ahead of the competition

NEW YORK – New York Attorney General Letitia James today continued her work to fight for consumers and small businesses in New York City by co-leading a bipartisan coalition of 37 attorneys general in a lawsuit sued Google LLC for its illegal and anti-competitive conduct in seeking to maintain the company’s monopoly power in the mobile app distribution and in-app payment processing markets. Through a series of exclusionary contracts and other anti-competitive behavior on the Google Play Store, Google has deprived users of Android devices of strong competition that could lead to greater choice and greater innovation, as well as at considerably lower prices for mobile applications. Attorney General James and the coalition – co-led by the attorneys general of Utah, North Carolina and Tennessee – also accuse Google of requiring app developers to sell in-app digital content. via apps purchased through the Google Play Store use Google Billing as an intermediary, forcing app users to pay Google’s commission (up to 30%) indefinitely.

“Google has served as the guardian of the Internet for many years, but more recently it has also become the guardian of our digital devices, which has made us all pay more for the software we use every day.” , said Attorney General James. “Once again we see Google using its dominance to illegally crush the competition and make billions in profits. Through its illegal behavior, the company has made hundreds of millions of Android users turn to Google, and only Google, for the millions of apps they can choose to download to their phones and tablets. Worse yet, Google is wringing the lifeblood out of millions of small businesses that are only looking to compete. We are filing this lawsuit to end Google’s illegal monopoly power and finally give voice to millions of consumers and business owners.

Google has shut down the Android app distribution ecosystem to competitors

Google launched its Android operating system (OS), originally marketing it as an “open source” platform. By promising to keep Android open, Google has managed to convince original equipment manufacturers (OEMs) – such as Samsung – and mobile network operators (MNOs) – such as Verizon – to adopt Android and, more importantly. yet, to give up the development of their own application stores to compete with the Google Play Store. After Google achieved a “critical mass” of adoption of the Android operating system by developers and application users, Google decided to shut down the Android operating system ecosystem – and the distribution market. relevant Android applications – to any effective competition, among other things, requiring OEMs and MNOs to enter into various exclusivity contracts and other restrictions. These contractual restrictions not only discourage, but prevent OEMs and MNOs from competing, or fostering competition, in the relevant market. Today’s lawsuit alleges that Google’s conduct constitutes, among other things, an illegal maintenance of a monopoly.

To support Google’s efforts, Attorney General James and the coalition further allege that Google has engaged in the following behavior, all aimed at strengthening and protecting its monopoly position on the distribution of Android applications:

  • Google imposes technical barriers that strongly discourage or completely prevent third-party app developers from distributing apps outside of the Google Play Store. Specifically, Google is incorporating into Android a series of deceptive security warnings and other barriers that discourage users from downloading apps from any source outside of the Google Play Store, thereby preventing developers from downloading apps from any source outside of the Google Play Store. direct-to-consumer distribution applications and application stores.
  • Google has not allowed Android to be used as “open source” for many years, effectively cutting off potential competition. Google requires OEMs who want to design their devices to use Android to enter into agreements called “Android Compatibility Commitments” or ACC. Under these take it or leave it agreements, OEMs must commit not to create or implement variations or versions of Android that deviate from the version of Android certified by Google.
  • Google’s required contracts prevent competition by forcing Google’s proprietary apps to be “preloaded” on virtually all devices designed to run on the Android operating system, and require Google’s apps to be given the most prominent place on the market. device home screens.
  • Google is “buying up” its potential competition in the application distribution market. Google has been successful in persuading OEMs and MNOs not to compete with the Google Play Store by making deals that reward OEMs and MNOs with a share of Google’s monopoly profits.
  • Google requires app developers and app users to use Google’s payment processing service – Google Play Billing – to process all payments for digital content purchases made in apps obtained through the Google Play Store. Thus, Google illegally links the use of Google’s payment processor – which is a separate service within a separate marketplace for in-app payment processing – to distribution through the Google Play Store. By forcing this link, Google is able to extract outrageous processing fees for each transaction, up to 30%, and several times higher than the payment processing fee charged in competitive marketplaces.

Coalition claims Google’s conduct violates Sections 1 and 2 of the Sherman Act; New York’s Donnelly Act; and a number of New York consumer protection laws, including Executive Law 63 (12) and General Business Law § 349, as well as the antitrust and consumer protection laws of various other states. The coalition is asking the court to end Google’s illegal behavior and restore a competitive market. States are also seeking redress for consumers through triple damages and restitution for unfair profits, in addition to civil penalties.

Attorney General James is co-leading the lawsuit against Google today after similarly co-leading a separate antitrust lawsuit against Google last December. Attorney General James co-led a bipartisan coalition of 38 Attorneys General to sue Google for its illegal and anti-competitive conduct that sought to maintain the company’s monopoly power over general search services and the advertising markets of research.

Attorneys General for Utah, North Carolina and Tennessee join Attorney General James to co-lead the coalition in filing this lawsuit. The four attorneys general are joined by the attorneys general of Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Idaho, and Iowa, Indiana, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, Virginia, Washington, West Virginia and District of Columbia.

For New York, this case is being handled by Deputy Attorneys General Bryan Bloom and Morgan Feder, and Bureau Chief Elinor Hoffmann – all from the Antitrust Bureau. The Antitrust Office is part of the Economic Justice Division, which is overseen by Chief Deputy Attorney General Chris D’Angelo and Senior Deputy Attorney General Jennifer Levy.

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