Google Is Getting Set to Be Sued Once Again By States for Alleged Antitrust Violations
It seems these days as if Big Tech is hurtling from one lawsuit to the next as shareholders have begun to worry about their continued survival in light of the mounting legal worries. States have begun to mount a number of antitrust challenges to these companies that could result in the eventual breakup of Big Tech. The latest possible challenge surrounds the Google Play Store. The possible allegations are that Google takes advantage of the power of its platform to extract a large share of revenues from app developers. Google may also be under attack for its dominance of the app platform and practices for banning developers.
Here, several states have indicated that they will file this lawsuit in the near future. The attorneys general of New York, Utah and North Carolina are investigating and will be leading the inquiry. They are expected to be joined by several other states that will also be plaintiffs in the lawsuit.
The Play Store Business Practices Are at Issue
In these cases, app developers have been complaining about Play Store's operating and business practices. Google can act to ban certain apps from its Play Store, and that could have the effect of keeping them out of consumer's hands. In addition, Google takes very large commissions from these developers that can reach as much as 30% of their revenue. Google has been stepping up some of its enforcement practices in the past year, which has resulted in some developers being banned from the platform.
The maker of the popular game Fortnite highlighted this problem when it took Google on over its high fees. Epic Games sued over Google's high fees. The same day that Epic legally challenged both Apple and Google, it found its billion dollar game removed from both of the platforms. Epic claims that Google abused its monopoly power to retaliate against it for the lawsuit. In addition to a civil antitrust investigation, Google has also been sued by Epic Games in a class-action lawsuit that could mean massive damages if the court case is successful.
For its part, Google claims that it maintains an open platform on the Android operating system. The tech giant argues that users can download another app store on their device. This would allow them to access apps that Play Store has removed. In other words, the company's defense is that there is nothing preventing users from purchasing these apps elsewhere if they chose.
Nonetheless, many users just assume that Google Play Store is the only app options when they use an Android device. Google Play Store comes preinstalled on all Android devices, but the other app stores do not. However, Google believes that it is on more solid legal ground than Apple because it allows users to access other app platforms. Apple keeps an iron grip on its iPhones, mandating that its app store is the only one allowed on its phone. Apple is also facing antitrust scrutiny over its App Store practices.
Governments Have Filed Three Previous Antitrust Lawsuits Against Google
For Google, this would be the fourth different government lawsuit filed in the past year that challenges its business practices. Already, the company's search business and advertising platforms are under attack for being anticompetitive. These businesses are the heart of Google and provide it with most of its revenues. The odds are growing that Google will be forced to divest itself of at least one of its businesses and possibly more. Google is far from the only Big Tech company being forced to defend its very existence. Facebook is also facing lawsuits based on its ownership of WhatsApp and Instagram.
Google is entering one of the most perilous periods in its existence. The sheer number of lawsuits and the conduct that they are alleging could eventually mean the end of Google as we know it. The tech giant seems to have made enemies on both sides of the aisle, and attorneys general from both parties have been actively investigating the company. Google has committed to fighting each of these lawsuits as they pose an existential threat to the company. Beyond the states, the European Union is probing Google's advertising practices. The sum total of the legal challenges that Google is facing could end up being too much to overcome. 2021 is going to be perhaps the most momentous year in the history of Google.
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