The Shocking Reason 36 States Just Filed a Major Lawsuit Against Google
Over the past few decades, Google has become a major part of public life. "Just Google it" is a phrase you hear regularly, and depending on your electronics, Google might be responsible for your phone, television, home lighting system, and more. However, Google's widespread reach is becoming concerning to many people. Late Wednesday evening, a major lawsuit was announced.
Multiple States Join Together to Sue the Tech Giant
36 states have banned together in a federal lawsuit against Google. This case involves collaboration between multiple attorneys general, and it is led by the attorneys generals of New York, North Carolina, Tennessee, and Utah. Other involved states include Alaska, California, Florida, Massachusetts, New Mexico, Orego, and more.
The lawsuit was filed in California and includes a complaint that Google is breaking federal laws by shutting out competing businesses from developing their own Android software. In a press release on the subject, Attorney General Jennings states, "Google routinely and systematically uses its market share to exploit other businesses and smother competition. It is a Goliath that uses a flat-out predatory business strategy to ensure that nobody can challenge its dominance of the tech space."
Google Faces a Massive Antitrust Lawsuit
Though Google has been accused of many types of monopolies before, this case focuses primarily on Google's behavior in the Android app distribution market. According to the lawsuit, Google is allegedly operating a monopoly on the Android app distribution market. The issue is that the majority of apps for Android phones have to be released only in the Google Play Store.
When a mobile developer makes an app, they will quickly find that it is almost impossible to release the app without going through the Play Store. Due to the contracts Google has with cellphone manufacturers, most devices will not download an app without going through the Play Store. Though Android operating systems technically allow multiple app downloading stores, Google's techniques make it hard for anyone with a phone from a major cell carrier to use other app stores. Other companies have tried to develop their own competing app stores, but Google quickly swoops in to buy out competition.
The forced reliance on the Play Store is bad for many app developers. First of all, the Play Store requires apps to pay a commission of up to 30 percent with in app purchases. This takes away profits from app developers at a much higher rate than other app stores. Furthermore, app developers are forced to comply with Google Play Store standards with may be detrimental to their business goals.
Consequences Could Be Very Severe
This lawsuit could be quite bad for Google. Even if the tech giant does not lose the lawsuit, a prolonged legal case could bring negative attention to the company and remind the public of their unsavory business tactics. At a time when many people are beginning to worry about Google's involvement in so much of their lives, any accusations of monopoly may concern the company.
If Google does lose the lawsuit, consequences may be quite severe. First of all, they may face heavy fines. Losing the lawsuit could mean that Google would be compelled to offer compensation to those harmed by their actions. California is a state that allows for punitive damages in a lawsuit, so Google could face extra fines meant to punish them for their unethical behavior. Federal law also allows fines of up to $10 million for corporations that break antitrust laws.
Of course for a multibillion dollar company like Google, losing millions in a lawsuit is more of a minor inconvenience instead of a major problem. The bigger issue for Google could be that losing an antitrust lawsuit would require them to change their business practices. Depending on what sorts of issues are brought up in the lawsuit, Google could potentially have to stop using certain business techniques or break up various departments into independent companies.
In the long run, this antitrust lawsuit is just a small part of the many legal challenges faced by the tech giant. They are also dealing with a lawsuit from the Justice Department about the way they maintain dominance in internet search services and advertising. Overseas, Google is also experiencing legal pressure from The European Commission, Australian authorities, and United Kingdom authorities. In almost all these cases, the issue at the heart of the matter is whether Google is unfairly using their market dominance to edge out competitors.