Dozens of U.S. state attorneys general filed an antitrust lawsuit in federal court against Alphabet Inc’s Google on Wednesday.
The 144-page lawsuit was filed by 36 states and the District of Columbia in U.S. District Court for the Northern District of California, court documents obtained by DailyMail.com show.
It claims Google violated the Sherman Act, the federal law prohibiting monopolistic business practices.
The states have been expected to file a lawsuit saying that the search and advertising giant violates antitrust law in running its app store for Android phones, according to sources familiar with the matter.
Dozens of U.S. state attorneys general filed an antitrust lawsuit in federal court against Alphabet Inc’s Google on Wednesday
The lawsuit was filed by 36 states and the District of Columbia in U.S. District Court for the Northern District of California
It claims Google violated the Sherman Act, the federal law prohibiting monopolistic business practices
The Sherman Act forbids nefarious dealings to establish or maintain a monopoly to stifle competition
A 144-page lawsuit filed by 36 states and the District of Columbia in U.S. District Court for the Northern District of California, it claims Google violated the Sherman Act, the federal law prohibiting monopolistic business practices.
The Sherman Act forbids nefarious dealings to establish or maintain a monopoly by restraining free competition.
The act was famously used in 1911 to break up Standard Oil, and again in 1982 to split up AT&T’s monopoly, known colloquially as ‘Ma Bell’.
In 2001, Microsoft survived a Sherman Act suit, settling with the DoJ without breaking up.
New Jersey AG Gurbir S. Grewal hailed the filing in a press release on Wednesday, while noting it is the second antitrust lawsuit against Google that Garden State has filed over the last year.
Grewal previously joined a coalition of attorneys general in suing Google for allegedly violating federal antitrust laws on December 17, 2020 – the litigation of which remains pending.
‘Google failed to keep its promise to maintain Android as an ‘open source’ operating system, and instead unlawfully maintains a monopoly for its own Google Play Store in the market for distributing Android-compatible mobile apps,’ the press release reads.
The complaint also alleges Google used ‘illegal tying arrangements to unlawfully maintain a monopoly in the market for Android in-app payment processing.’
Grewal said in the release: ‘As I’ve said before, big tech companies like Google have incredible power over our daily lives.’
‘How they acquire and exert their power and influence over our behaviors must be scrutinized. Today’s lawsuit sends the message that no company is too powerful to avoid real accountability,’ he said.
The lawsuit reads: ‘Google has employed anticompetitive tactics to diminish and disincentivize competition in Android app distribution.’
‘Google has not only targeted potentially competing app stores, but also has ensured that app developers themselves have no reasonable choice but to distribute their apps through the Google Play Store,’ it added.
Google requires that some apps use the company’s payment tools and give Google as much as 30% of digital goods sales.
The lawsuit reads that: ‘Google also requires all app developers that sell content through the Google Play Store to sell any digital in-app content through Google Play Billing.’
‘Google now stringently enforces this tie by preventing apps distributed through the Google Play Store from using, directing consumers to, or even informing consumers about alternative payment processing options that may provide lower prices.’
The lawsuit also alleges that Google has ‘steadily expanded its illegal tie’ regarding payments to music and video streaming services.
‘Effective September 2021, subscription streaming services for music and video -which Google previously exempted – must either submit to Google’s tie or deny consumers the ability to purchase subscriptions from their Android apps,’ the lawsuit reads.
The lawsuit added: ‘Google’s comparable streaming services will gain an enormous competitive advantage. Moreover, the non-Google payment processors that these services currently use will be forced out of the in-app payment (‘IAP’) market as to these services.’
News of the lawsuit comes as Epic Games, the maker of the popular game Fortnite, is trying to break Apple’s tight grip on its App Store, and potentially disrupt the entire mobile ecosystem
Apple and Google saw their respective mobile app shops thrive as the Silicon Valley giants remained under fire for the power they wield at their respective marketplaces
The lawsuit reads that ‘Android is the only viable operating system available to license by mobile device manufacturers that market and sell their devices to U.S. consumers’ and that Google ‘controls approximately 99% of this market.’
‘Google Play Store distributes over 90% of all Android apps in the United States. No competing Android app store has more than 5% of the market,’ the lawsuit reads.
Among the barriers Google allegedly uses to ‘thwart competition’ are warnings when consumers attempt to sideload apps – which is moving a file or program locally from one device to another without the use of the internet or the Google Play store.
‘Google acknowledges that the security settings and warnings associated with sideloading limit even mainstream, non-malicious apps and app stores from reaching Android users,’ the lawsuit reads.
‘Even secure, highly curated Android apps and app stores like Fortnite and the Amazon Appstore are subject to such warnings.’
Google said last September it would ramp up enforcement of its policies, drawing criticism from app makers. Google’s Play Store is far more widely used than similar products from Amazon.com, Samsung Electronics, Huawei Technologies and others.
The new lawsuit drew praise from Meghan DiMuzio, executive director for the Coalition for App Fairness, which represents companies including Match Group Inc and Spotify Technology SA that oppose some of the Play Store rules.
‘Anti-competitive policies stifle innovation, inhibit consumer freedom, inflate costs, and limit transparent communication between developers and their customers,’ DiMuzio said.
Apple Inc’s App Store for iPhones and iPads imposes similar restrictions to Play Store. Google does enable consumers to avoid the Play Store, but critics say it is not practical to do so.
Both companies have drawn legal scrutiny.
The Mountain View, California, company also is fighting the three other lawsuits that were filed against it last year, including a landmark case brought by the U.S. Justice Department.
Those cases are focused on alleged abuses of Google’s dominant search engine and its digital ad network that generates more than $100 billion in annual revenue for its corporate parent, Alphabet Inc.
Video game maker Epic Games sued Google and Apple separately in federal court in California last year over app store policies. Proposed classes of developers and consumers have joined the cases.
A judge’s decision in the Apple fight is expected in the coming weeks, and a hearing on Google’s effort to dismiss the case against it is scheduled for July 22.
The states’ lawsuit is headed by a group including attorneys general of Utah, New York, North Carolina and Tennessee, and joined by others including California and the District of Columbia.
‘Google´s monopoly is a menace to the marketplace,’ said Utah Attorney General Sean Reyes, who is leading the lawsuit.
‘Google Play is not fair play. Google must be held accountable for harming small businesses and consumers.’
The lawsuit filed on Wednesday comes as lawmakers in recent weeks have introduced legislation seeking to curtail the dominance of tech giants like Apple and Google.
Silicon Valley lobbyists and executives like Apple’s CEO Tim Cook have warned the lawmakers that the ‘rushed’ legislation could disrupt ‘innovation,’ The New York Times reported last month.
‘Executives, lobbyists, and more than a dozen think tanks and advocacy groups paid by tech companies have swarmed Capitol offices, called and emailed lawmakers and their staff members, and written letters arguing there will be dire consequences for the industry and the country if the ideas become law,’ the outlet reported.
Lawmakers have proposed a total of six bills that would would ’empower regulators’ and ‘make it harder for the tech giants to acquire start-ups.’
Brian Huseman, a lobbyist for Amazon, warned in a statement last month that the legislation ‘would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store and tens of millions of consumers who buy products from Amazon.’
According to The New York Times, Google’s lobbyist Mark Isakowitz as well as Kent Walker, senior vice president for global affairs, told lawmakers the bills would ‘break’ consumers’ favorite services.
Facebook spokesman Christopher Sgro told the outlet that antitrust laws ‘should promote competition and protect consumers, not punish successful American companies.’
App revenue from mobile phone users around the world climbed to new heights in the first half of this year, nearly reaching $65 billion, market tracker Sensor Tower said last month.
Apple and Google saw their respective mobile app shops thrive as the Silicon Valley giants remained under fire for the power they wield at their respective marketplaces.
Preliminary figures from Sensor Tower indicate that $64.9 billion was spent across the App Store and Google Play in the first six months of this year in a 25 percent jump from the same period in 2020.
Sensor Tower projected that $41.5 billion would be spent at Apple’s App Store during the first half of this year on subscriptions and apps, including in-app purchases such as virtual items for game characters.
Google Play was expected to generate a total of $23.4 in revenue by the end of June, Agence France-Presse reported last month.
Video-snippet sharing sensation TikTok was the top grossing non-game mobile app, with users spending more than $920 million in a increase of 74 percent from the first six months of last year, according to Sensor Tower.
Google-owned video streaming platform YouTube was the second biggest non-game revenue generator, with users spending some $565 million there, the market tracker estimated.
Daily Mail files anti-trust lawsuit against Google for ‘illegally building its dominance in ad tech industry’
In April, MailOnline/DailyMail.com filed a lawsuit against Google for alleged anti-competitive behavior claiming the search giant manipulates ad auctions and news search results in a way that punishes online publishers.
Associated Newspapers Ltd. and Mail Media Inc, the parent company of DailyMail.com and MailOnline, filed the antitrust lawsuit against Google in US District Court in New York.
The lawsuit accuses Google of utilizing its market power dominance to increase profits for themselves by engaging in bid-rigging and search bias that harms publishers and advertising rivals.
The lawsuit filed by Daily Mail alleges Google illegally built its dominant position in the ad tech industry over the last decade and now controls the tools that publishers and advertisers use to buy and sell online ad space in what has become a $125 billion industry.
These tools include the software that publishers use to sell ad inventory and the marketplace, referred to as an exchange, where millions of ad slots are sold in auctions each day.
Google exploits its control of those ad tech tools by forcing publishers to use its own ad server, which it has tied to its own exchange, in a bid to stamp out competition from rival exchanges, the lawsuit alleges.
The search giant’s ad server controls more than 90 percent of the market for publisher ad serving and its exchange controls more than 50 percent of the exchange market, according to the suit.
According to the complaint, Google makes it difficult for publishers to compare prices among different exchanges, reduces the number of exchanges that can submit bids for ad space and even uses bids offered by rival exchanges to set its own bids.
This lack of competition means Google ends up ahead because it controls a growing share of the ad space that remains, the lawsuit alleges.
‘This lawsuit is to hold Google to account for their continued anti-competitive behavior including manipulation of ad auctions and news search results, bid rigging, algorithm bias and exploiting its market power to harm their advertising rivals,’ a Daily Mail spokesman said.
‘Despite increased criticism by regulators and governments around the world, Google’s ongoing behavior clearly shows they are not prepared to change their conduct.
‘DailyMail.com brings this antitrust action for compensation and for injunctive relief to restore competition in the monopolized markets and safeguard news content for readers. This includes, but isn’t limited to the elimination of forced tying of products, bid rigging and bias in news search results, while also providing transparency when they make changes to their algorithm.
‘DailyMail.com is a world leader in digital news and is taking this necessary action to address Google’s harm to publishers and to protect freedom of speech.’
According to the complaint, Google punishes publishers by allegedly manipulating search rankings if they do not sell enough advertising space through the tech company’s own exchange.
For example, keywords related to Daily Mail’s recent coverage of the UK royals and Piers Morgan, who is DailyMail.com’s editor at large, has not prominently shown up in Google search results.
Data shows that the Daily Mail’s visibility share on Google’s search results pages was just 1.65 percent for search terms ‘Harry and Meghan’ between March 1 to March 11 compared to the BBC’s 16.62 percent.
Daily Mail’s share for the keywords ‘Piers Morgan’ accounted for 1.57 percent of visibility share on Google. Meanwhile, the Independent and the Guardian had 13.7 percent and 11.8 percent visibility in search.
The keyword ‘Prince Phillip’ had 1.34 percent visibility share on Google, compared to the BBC’s 17 percent.
Back in June 2019, Google allegedly punished Daily Mail over a three month period by causing it to disappear from its search results because the news publisher wasn’t selling as much ad inventory through the search giant’s exchange.
Globally, spending in mobile games hit $44.7 billion in the first half of this year, up nearly 18 percent from the same period in 2020, according to Sensor Tower.
‘While consumer spending in mobile games is growing at a slower clip than last year, this doesn’t indicate a downturn for the industry but rather a normalization after the surge in interest during the extraordinary circumstances of the Covid-19 pandemic,’ Sensor Tower said in a post.
Chinese internet titan Tencent had the top grossing mobile game, Honor of Kings, which generated more than $1.5 billion in the first half of this year, according to the market tracker.
The survey shows the growing importance of the so-called ‘app economy’ and comes amid criticism over the tight control of the two large marketplaces by Apple and Google.
The Sensor Tower figures were released as a federal court mulls evidence presented during a trial in which Epic Games is trying to break Apple’s tight grip on its App Store, and potentially disrupt the entire mobile ecosystem.
Epic, maker of the popular Fortnite video game, is seeking to force Apple to open up the App Store to third parties seeking to circumvent Apple’s procedures payment systems and its commission as high as 30 percent in the process.