On December 18 Bloomberg reported that at least three states are investigating Google. The Google app store fees charged to its developers are the focus of this investigation. The states are exploring filing an antitrust lawsuit against Google early next year as well. The Google app store fees developers are charged is 30%. Which is the same as Apple charges its developers.
Attorney generals representing Utah, North Carolina, and New York to name a few are preparing a lawsuit. The lawsuit's filing could be as soon as January according to people familiar with the lawsuit.
An antitrust lawsuit would be a new attack against Google and its app store. A group of 38 attorneys sued Google in federal court on December 17. The group accused Google of abusing its power as a result of its dominance in online searches. The lawsuit goes beyond claims the Justice Department brought up in an October lawsuit. The lawsuit also follows another suit by 10 states claiming Google thwarted competition illegally.
Google App Store fees bring the company legal trouble
The 30% fee imposed by Google is the feature that allows users to subscribe to services and buy upgrades from within their favorite apps. The 30% fee does drop down to 15% for any user that subscribes to an annual or longer subscription. Google’s and Android’s rival Apple has the same policy.
U.S. attorneys are continuing to pressure tech companies as evident from this investigation. The government feels these companies' conduct is damaging competition in digital markets. When Facebook was sued earlier this month New York, North Carolina, and Utah led the way in that lawsuit as well. They argued that when Facebook acquired Instagram and WhatsApp the company violated antitrust laws.
Google has a defense in regrades to this investigation. Google’s Sameer Samat, Vice President of Android and Google Play, said “Android has always allowed people to get apps from multiple app stores.” As a result of this, each app store controls its own business model and features. Consequently, if a developer and Google do not see eye to eye on certain terms the developer can use another app store.
While Google would like to get this cut from many companies, they have given some companies a pass. For example, Netflix and Spotify have been exempt from the 30% fee. Google says they will step up efforts to fix this and remove any apps that do not implement Google’s payment system. Fortnite is the biggest example of Google removing apps from the Play Store.
Google finds itself in the same scenario as its rival Apple. However, Apple has dialed back its stance on their fees however. Recently Apple made it where developers who generate less than $1 million in revenue will only have to pay a 15% fee to Apple.