Google reached a preliminary agreement with all 50 states over an alleged app store monopoly

The Utah Attorney General’s Office was a lead plaintiff in the bipartisan lawsuit.

(Alastair Grant | AP file photo) The Google logo is displayed at their offices in London on November 1, 2018. In a letter dated Wednesday, August 23, 2023, children’s advocacy groups, including Fairplay and Common Sense Media, called on the Federal Trade Commission to open an investigation into Google. They said the tech giant is running personalized ads targeting children on YouTube despite federal law banning the practice.

All 50 states, the District of Columbia and Puerto Rico have reached an agreement in principle with Google to settle a lawsuit filed in 2021 over the tech giant’s alleged monopoly control over app distribution of the software that powers most of the world’s cell phones.

The agreement, cited in a lawsuit filed Tuesday, is subject to approval by plaintiffs’ attorneys general and the board of directors of Google’s parent company, the signing of an agreement, and court approval.

According to the Utah Attorney General, a lead plaintiff in the bipartisan lawsuit, the terms of the interim agreement prohibit the parties from disclosing its details for now.

“No company is too big to play by the rules, including Google. “We have filed this lawsuit because it is illegal to use monopoly power to inflate prices,” New York Attorney General Letitia James said in a statement.

The states “fought for a fair market that encourages competition, innovation and lower prices for consumers,” she said, and look forward to “finalizing the agreement and announcing more details over the next 30 days.”

Google spokesman Peter Shottenfels said the company had “no comment at this time.”

November 6th was set as the date for negotiations.

The lawsuit, originally filed by 36 states and the District of Columbia in federal court in Northern California, reiterated similar allegations made by mobile game maker Epic Games against Google, which are scheduled to go to trial in November.

Apple prevailed in a separate lawsuit filed by Epic against the company over the separate app store it operates exclusively for iPhones, with a federal appeals court upholding sole control of app distribution in April.

Google still faces several major antitrust lawsuits filed by the Justice Department and other government agencies in the US, focusing on allegedly monopolistic behavior related to search and the advertising market. The judge’s case related to the search is scheduled to be heard on September 12.

In November, Google agreed to track user location with 40 states, paying $391 million.

The lawsuit, now settled for the time being, was among measures taken in recent years to stem the enormous power of Google, Apple, Facebook and Amazon, which have built unprecedented digital empires by locking consumers into closed-loop services with minimal competition.

Like the Epic lawsuit, the states’ lawsuit primarily focused on the control Google exercises over its Play app store, allowing the company to collect commissions of up to 30% on digital transactions in apps running on smartphones installed with the Android operating system. These devices make up more than 80% of the global smartphone market.

Although its app commissions are similar to Apple’s, Google has tried to differentiate itself by allowing consumers to download apps from places other than the Play Store. In contrast, Apple does not allow iPhone users to install apps from any provider other than its own store.

However, the states’ lawsuit challenged Google’s claim that its Android software is an open operating system that offers consumers more choices. It was alleged that Google erected anti-competitive barriers to ensure it distributed more than 90% of apps on Android devices – a market share that attorneys general described as an illegal monopoly.

Among the lawsuits the Mountain View, California-based company is still battling is a landmark case brought by the US Department of Justice in 2020 that focuses on alleged misuse of the dominant search engine Google and its digital advertising network, the brings approximately $100 billion in annual revenue to the parent company, Alphabet Inc.

Justin Scaccy

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