Antitrust Class Action Lawsuit Says Google Play App Store Is a Monopoly

Google has been hit with another antitrust lawsuit, this time a class action lawsuit brought by a New York consumer suing over its Google Play app store.

Kondomar Herrera filed the class action lawsuit in the U.S. District Court for the Northern District of California on Oct. 20 claiming the tech giant violated the federal Sherman Act by creating a monopoly in the Android mobile device app market. That monopoly has resulted in higher prices for apps that are lower quality and little if any recourse available to consumers, Herrera says.

The class action lawsuit was filed the same day the U.S. Department of Justice and 11 states leveled landmark antitrust charges against Google in federal court in Washington, D.C. In that case, the government is accusing Google of paying billions of dollars to smartphone companies to make Google the default search engine on their web browsers.

The practice limits competition and innovation by holding Google’s search engine rivals back, the justice department’s lawsuit claims.

Herrera’s claims about Google’s approach to capturing the lion’s share of the Android mobile app market are similar to the federal government’s claims about the search engine business.

According to the class action lawsuit, Google Play is the largest app store in the world — it is available to all users of smart phones and mobile devices built on an Android operating system. It offers more than 2.96 million applications and racked up in excess of 84.3 million downloads in 2019.

“To 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,” the class action lawsuit says.

As Google Play grew in popularity and the Android operating system took over a larger market share, “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,” Herrera claims.

Google negotiates contracts with mobile device manufacturers to pre-install Google Play on their products and feature it on the home screens of phones and tablets, the Herrera class action claims. As a result, 90% of apps downloaded to Android-based devices are purchased from Google Play.

It also requires app developers to use “Google’s proprietary in-app billing for certain in-app purchases,” the class action lawsuit says, and it blocks apps “offered outside the Google Play Store from offering basic functions, such as automatic updating of apps in the background, which is available for apps downloaded from the Google Play Store.”

Herrera is suing, she said, because Google’s practices have resulted in consumers being charged “supracompetitive” prices for apps, 30% of which go directly to Google, helping it “generate more than $21.5 billion in ill-gotten revenue.”

Herrera’s class action lawsuit is the second filed against Google this month. Another plaintiff filed in the same federal court in California on Oct. 9 accusing the Google Play Store of the same legal violations as those alleged by Herrera: forcing anticompetitive contractual restrictions on app developers and charging consumers “supracompetitive” prices for apps.

“Google’s conduct has had no legitimate pro-competitive justification considering its anticompetitive effects, and therefore it has unreasonably restrained competition in the Android Mobile App Distribution Market,” the class action lawsuit claims.

Last year, the European Commission fined Google $1.7 billion over antitrust claims about its online advertising practices. In 2017, the commission hit the company with $5 billion in fines for unfair business practices related to the contracts it has with mobile device manufacturers to preload its apps.

Herrera is seeking to represent a class of consumers who, like herself, purchased apps through the Google Play app store, or made in-app purchases. Though the class action lawsuit does not estimate the number of eligible consumers, it predicts “there are, perhaps, tens of millions of geographically dispersed Class Members.”

Do you get your mobile apps from the Google Play app store? Do you think the apps have a higher price tag and lower quality than apps available through other platforms? Tell us about it in the comment section below.

Lead plaintiff Herrera and the proposed Class Members are represented by Laurence D. King, Mario M. Choi, Robert N. Kaplan, Hae Sung Nam, Frederic S. Fox, Donald R. Hall and Aaron L. Schwartz of Kaplan Fox & Kilsheimer LLP.

The Google Search Class Action Lawsuit is Kondomar Herrera, et al. v. Google, LLC, Case No. 5:20-cv-07365, in the U.S. District Court for the Northern District of California.

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