On the heels of the Department of Justice’s antitrust suit against Google in the internet-search and related markets, Google was sued on Tuesday in the Northern District of California for antitrust violations in the market for apps on Android mobile phones.
According to the class-action complaint, the majority of a user’s mobile device screen time is spent on a mobile app; these apps are often downloaded from an app store, which “centralizes and curates the distribution of mobile apps in a convenient, user-friendly manner.” Plaintiff Kondomar Herrera stated that “Google owns and operates the largest app store on earth, the Google Play Store,” which is available on Android devices. For instance, the plaintiff claimed that the Google Play Store “offers users the choice of more than 2.96 million apps, and in 2019, users worldwide downloaded those apps more than 84.3 billion times”; the Google Play Store purportedly “contains more than 90 percent of Android mobile app downloads worldwide.”
Accordingly, the plaintiff proffered that in order “[t]o build this prodigious marketplace, Google represented that the Android OS would be maintained as “open” source software whereby anyone could create Android-compatible products without undue restrictions. But, as the app store grew and as Google’s Android OS became the ‘must have’ operating software for mobile device original-equipment manufacturers (‘OEMs’), Google began to close its ecosystem through a series of restrictive agreements that were designed to (and did in fact) deter and eliminate competition in the market for Android mobile apps and in-app products, (‘the Android Mobile App Distribution Market’).” For example, Google’s agreements with OEMs require them to “pre-install and prominently display the Google Play Store” on all of the mobile devices; Google prevents other app stores from being accessed through its app store; and it requires app developers to agree to not license their app to a rival app store. Thus, in order to get another app store, a user must go through the complicated process of sideloading, which has drawbacks such as not automatically updating. As a result, Google allegedly had anticompetitive restraints on OEMs and mobile-app developers. Subsequently, the plaintiff averred that Google maintains an unlawful monopoly in this market. Consequently, this alleged anticompetitive conduct allowed Google “to extract supracompetitive profits from consumers…who paid Google directly for mobile apps purchased through the Google Play Store.” Moreover, Google also takes a 30 percent commission from the sale of mobile apps and in-app purchases, in comparison other services like PayPal has a 2.9 percent commission; the plaintiff contended that this commission constitutes ill-gotten revenue.
The plaintiff and putative class, users who have paid for apps and/or made in-app purchases via the Google Play Store, claimed that they have been harmed by Google’s anticompetitive conduct because “developers set higher app prices due to the high costs imposed on developers by Google,” and “app quality has been reduced as app developers generated lower returns.”
Google is accused of violating the Sherman Act for its purported unlawful monopoly, and unlawful restrains of trade in the relevant market. Google is also charged with unreasonable restraint of trade in the Android Mobile App Distribution Market in violation of the California Cartwright Act.
Plaintiff Herrera has sought to permanently enjoin Google from monopolizing the relevant market and from engaging in anticompetitive conduct in its agreements; an award for damages; an award for costs and fees; and other relief. The plaintiff is represented by Kaplan Fox & Kilsheimer LLP.
A similar suit was filed against Google earlier this month.