Google Antitrust, Yet Another Case for Alphabet
July 12, 2021
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by Stephen Kanyi

A wave of antitrust has been sweeping the tech world and Google is its latest victim. Last week a coalition of attorneys general launched an antitrust lawsuit against the tech giant challenging its control over its Android app store. The suit has been a group effort of 36 states including Utah, New York, Iowa, Colorado Arizona and many others.

It comes at a time when the tech world has been facing a barrage of criticisms over the apparent growing monopolization of power in Silicon Valley. It was only last week that a similar antitrust case against Facebook over its apparent monopoly power in social media was thrown out by U.S District Judge James Boasberg who ruled that the FTC did not prove that Facebook is indeed a monopoly.

Multiple Lawsuits

This is however not the first lawsuit against the tech giant. Alphabet is currently facing multiple lawsuits most of which were filed last year. The first was filed in October last year where the company was criticized for using anti-competitive tactics to protect its control over general search. The complaint describes actions taken by the company to ensure that Google was the default search engine on smartphones and browsers. An example is the whopping $12 billion paid to Apple each year to ensure that Google is the default search engine on Safari and iPhones.

The second lawsuit also centres on the issue of Google’s monopoly over general search but this one argues that Google alters search results to draw prospective customers to Google’s properties. This is claimed to be illegal as its effect would be to increase Google’s control over the market rather than provide the best results.

On the third lawsuit filed in December, Google was accused of exploiting its control over advertising spaces on the web to imposes unfair conditions on publishers and advertisers while also discriminating against rival tech firms. Led by Texas, the lawsuit also made a startling allegation that Google and Facebook had made an illegal deal that would get Facebook to ease up on the ad competition in exchange for preferential treatment in ad-auctions run by Google.

New Case

Wednesday’s case was a reaction to Google’s plan to take a 30 percent commission on sales of all digital goods or services sold on apps in its Google Play Store. This would mean that even successful companies like Netflix, Spotify and popular games like Epic’s Fortnite will have to shell out quite a large portion of their revenue to Google. In fact, Epic Games had already filed a similar lawsuit last August alleging higher prices due to Google’s policies.

Unlike Apple’s App Store where apps can only be downloaded from on an iPhone, Android does allow rival stores to offer apps. These are like Amazon’s app store and Samsung’s app store that comes pre-installed in all Samsun devices.

Google does however have a monopoly in this space as it controls over 90 percent of the market.

Google also announced that it would start enforcing payment rules on its app store so that developers will be forced to use Google’s payment systems only for purchases made through the Play Store.

The complaint goes on to explain that Google has taken steps, some of which are illegal, to ensure that other stores do not grow. For example, many phones come with Play Store pre-installed while the Play Store does not allow other apps downloaded from its platform. These other stores are also denied advertising on Google’s search engine and YouTube the most popular video streaming service.

Google was also said to have taken steps to restrict the growth of Samsung Galaxy Store. They are reported to have offered an undisclosed sum and a portion of revenue from Play Store to Samsung so that the Korean based company would stop pursuing its plan to distribute popular apps like Fortnite. This plan however fell apart.

Google’s Response

In a detailed blog post Google dismissed the antitrust suit to be “meritless”.

“This lawsuit isn’t about helping the little guy or protecting consumers,” the company said. “It’s about boosting a handful of major app developers who want the benefits of Google Play without paying for it.”

Wilson White, Google’s public policy lead for Android and Google Play said that “If a developer feels that the value proposition of Google Play is not adequate, they can distribute their apps in a number of other ways.”

Despite this, these cases seem to be only the beginning of what seems to be a long-driven effort to check the power of these companies which are now deemed to be ‘too big’ in most legal circles.

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