Google sued by 36 states over alleged Play store abuse
Dozens of states sued Alphabet Inc.’s Google, alleging that the company illegally abused its power over developers that distribute apps through the Google Play store on mobile devices.
State attorneys general are targeting the fees Google takes from developers for purchases and subscriptions inside apps. The complaint was filed by 36 states and the District of Columbia in federal court in San Francisco on Wednesday.
The complaint marks a new attack by government officials in the U.S. against the search engine’s business practices. The Justice Department and a group of states filed separate complaints over Google’s search business last year, while another state coalition sued over Google’s digital advertising business.
Attorneys general from every U.S. state except California and Alabama announced an investigation into Google’s “potential monopolistic behavior.”
The states are taking on Google even after a federal judge in Washington last week threw out their antitrust lawsuit against Facebook Inc. That case accused Facebook of illegally crushing competition by buying Instagram and WhatsApp because it saw them as threats to its business. The judge said the states waited too long to challenge the acquisitions.
Google and Apple Inc. are a duopoly dominating the app economy of the Western world. The companies have come under intense pressure from regulators and some developers who complain that high app store fees and complex rules raise costs for consumers. A total of $143 billion was spent in mobile app stores in 2020, a 20% jump from the previous year, according to analytics firm App Annie.
Alphabet fell 0.3% to $2,594 at 5:14 p.m. in extended trading. Its shares are up 44% this year, outperforming broader U.S. indexes. Google didn’t immediately respond to a request for comment.
The Mountain View, Calif., company announced in March that it was halving the percentage it takes from app developers on sales through the Play store after a similar move by Apple. Google said it was reducing the fees to 15% from 30% for the first $1 million in revenue on sales of apps and in-app-purchases each year. After the first $1 million, developers will pay the typical 30% fee.