Dozens of States Sue Google Over App Store Fees

Google has argued that it allows other companies, such as Samsung and Epic Games, the creator of Fortnite, to operate app stores for its Android software. In the complaint, the states said that while the Google Play Store was the source of more than 90 percent of all Android apps in the United States, no other Android app store had more than 5 percent of the market.

The complaints join other cases against the tech giants or investigations into their practices. The Federal Trade Commission and a group of states both filed antitrust lawsuits against Facebook last year; a judge dismissed the complaints last month. The F.T.C. has also been investigating Amazon, and the Justice Department has asked questions about Apple’s business.

Apple, which operates the other major app store for smartphones, is also under scrutiny for the cut it takes from developers for app sales and subscriptions. Epic Games filed an antitrust suit against Apple last year, accusing it of abusing its market power to charge app makers unfairly high commissions. It is awaiting a decision on the case next month.

As the money flowing through Apple’s and Google’s marketplaces has grown into the tens of billions annually, developers said the companies were charging too heavy a tax for access. Since the two companies’ software controls almost all of the smartphones in the world, they said, developers have little choice but to adhere to their policies and pay the fees.

Last year, Google started cracking down on subscription-based app developers such as Netflix and Spotify, which circumvented the company’s payment system to avoid paying fees in its Play Store. Google said at the time that it was providing clarity on what types of transactions required using its payment system. It had said it would start forcing companies to integrate their payments with Google’s billing system in September 2021.

But as antitrust scrutiny on its Play Store started to build, Google said this year that it would reduce store fees for developers on the first $1 million in revenue every year to 15 percent from 30 percent.

The lawsuit on Wednesday also puts pressure on how Apple runs its own App Store. While Android allows people to circumvent the Play Store and add apps to their phones through other means, Apple’s mobile software does not. Effectively, it means there is no alternative to putting software on an iPhone without going through the App Store.

Article source: https://www.nytimes.com/2021/07/07/technology/google-play-store-antitrust-suit.html