U.S. States File Antitrust Lawsuit Against Google Over Its App Store

A total of 36 U.S. states have brought a new antitrust lawsuit against Google (NASDAQ:GOOGL), alleging that the company abuses its power over app developers through its Play Store on Android.

The new case marks the fourth antitrust lawsuit lodged against the online search engine by U.S. government enforcers in the past year.

By focusing on the Play Store, the latest lawsuit touches on an aspect of Google’s business that is most similar to Apple’s (NASDAQ:AAPL). The Apple App Store has become embroiled in legal challenges and drawn lawmaker questions over whether it unfairly charges developers for payments through their apps by customers and whether it favors its own apps over those of its rivals.

Attorneys general from 36 states and the District of Columbia are listed as plaintiffs in the latest case, which was filed in the Northern District of California. The states include California, Colorado, Iowa, Nebraska, New York and North Carolina, among others.

The plaintiffs claim that Google has used anticompetitive tactics to extract a 30% commission from consumers, who purchase subscriptions and digital content on their Android phones. App developers, they say, have no choice but to use Google’s software for distribution. Meanwhile, consumers have no options because Android is the only operating system available on many smartphones.

The Google Play Store distributes over 90% of Android apps in the U.S., while no other Android store has over 5% market share, according to the plaintiffs. They specifically call out Samsung, the top manufacturer of Android phones, saying that Google has tried to "buy off" the company by offering incentives to turn its Galaxy app store into a "white label" for the Play Store.

Besides the latest antitrust challenge, Google faces an ongoing lawsuit from the Department of Justice and several states alleging it used exclusionary contracts to ensure default status for its apps on devices from manufacturers that used its Android mobile operating system. It also faces a lawsuit from a group of Republican attorneys general focused on its advertising technology business, alleging it entered an anticompetitive agreement with Facebook.