Attorneys general from 36 states and the District of Columbia have brought a new antitrust lawsuit against Google over its app store policies -- including a plan to require Netflix, Spotify and other paid streaming apps to pay a 30% commission on subscription fees.
In a complaint filed Wednesday in U.S. District Court for the Northern District of California, the attorneys general allege that Google used anticompetitive tactics to ensure that app developers have "no reasonable choice but to distribute their apps through the Google Play Store."
Google allegedly did so in order to maintain its "extravagant commission" of up to 30% of the fees paid to developers who sell through the Play Store.
Google also allegedly “ensured it could continue to reap windfall commissions from apps” by charging the same 30% commission for in-app purchases, and requiring that consumers purchase in-app digital content through Google Play.
“By imposing this unduly restrictive and anticompetitive tie, Google can indefinitely collect supracompetitive commissions from consumers who purchase in-app digital content,” the attorneys general allege in their 144-page complaint.
Google currently doesn't charge a commission on streaming subscriptions purchased via apps available through the Play Store. But starting in September, Google will require subscription streaming apps to also pay the commission.
The attorneys general say the shift marks an expansion of Google's "tying" system -- which involves requiring app developers that sell content through Google Play to also sell in-app content through its billing platform.
“Google has steadily expanded its illegal tie: effective September 2021, subscription streaming services for music and video -- which Google previously exempted -- must either submit to Google’s tie or deny consumers the ability to purchase subscriptions from their Android apps,” the complaint alleges. “Google has also recently expanded the enforcement of its illegal tie to subscription services including those on job search, dating, fitness, and other apps.”
Google allows consumers to sideload apps -- that is, to download them from sources other than the official Play Store -- but the attorneys general contend that the company makes the process too difficult.
“Google makes the sideloading process unnecessarily cumbersome and impractical by adding superfluous, misleading, and discouraging security warnings and by deterring users by requiring them to grant permission multiple times for a single app installation,” the lawsuit alleges. “The effect of Google’s conduct is to practically eliminate competition in Android app distribution.”
The case is being led by attorneys general from New York, Utah, North Carolina and Tennessee.
Wilson White, Google senior director of public policy, called the complaint "a meritless lawsuit that ignores Android's openness."
He said in a blog post that manufacturers and carriers can preload competing app stores on devices, and that consumers can download apps from developers' sites without going through Google Play.
"Developers who don't like our policies can still distrivute their apps to Android users directly or through rival app stores without using our billing system or paying us a cent -- and many do," he wrote.
Google is currently facing three other antitrust lawsuits by the U.S. government -- including one case brought by the Department of Justice, one brought by a Texas-led coalition of states, and a third brought by a coalition of 48 attorneys general.