Google has monopoly over Android app market, suit says

Google faces another antitrust lawsuit as Android users represented by Cotchett, Pitre & McCarthy LLP accused the company of having an illegal monopoly over the Android apps market and overcharging customers who made purchases on the Google Play app store.

Tuesday's lawsuit came the same day the Justice Department accused Google of engaging in anti-competitive conduct to maintain illegal monopolies over searches and search advertising.

In the complaint filed in the Northern District of California by Cotchett attorneys alleged that Google could charge "supracompetitive" prices for mobile app and in-app purchases by having restrictive contractual terms.

Google requires manufacturers of cellphones, such as LG, Motorola and Samsung, to license the entire suites of Google applications and services for manufacturers to use the Android mobile operative system on devices developed by Google. The tech giant also requires manufacturers to pre-install the Google Play Store on their homepage. If manufacturers don't follow the terms, they lose access to the operative system, according to the lawsuit.

"The Google Play Store is the dominant market that consumers use to purchase apps and use the Android ecosystem. The lawsuit seeks to hold Google accountable for taking advantage of its monopoly to overcharge its own customers," Mark Molumphy, a partner at Cotchett, said in a statement.

According to the lawsuit, Google's Android operative system represents more than 95% of licensable mobile operating systems for smartphones and tablets in the United States.

Cotchett, Pitre & McCarthy represents Brian McNamara and others similarly situated in the proposed class action.

Without the restraints, plaintiff and class members "would not have to pay supra-competitive price for mobile apps and in-app purchases," according to the complaint. "Google's anti-competitive practices also stalled, limited or foreclosed competition and innovation in the Android Mobile App Market." McNamara v. Google LLC & Alphabet Inc., 5:20-cv-07361 (N.D. Cal., filed Oct. 20, 2020).

"The Play Store effectively functions as a gatekeeper for software distribution on all mobile devices with Android OS," Elizabeth Castillo, another partner at Cotchett, Pitre & McCarthy said in a statement.

According to Prasad Krishnamurthy, professor at UC Berkeley School of Law, Google can argue that substitute products are available.

"Google's operating system is open source," Krishnamurthy said. "And for that reason, other software developers can always write for Android. So that's an argument that Google is going to make, that it's easy for other applications to be written to run on Android because it's designed to be an open-source operating system."

Samuel Miller, adjunct professor at UC Hastings Law, said the lawsuit is similar to another antitrust case involving Apple and Epic Games, concerning Apple's alleged anti-competitive conduct over its marketplace for apps and 30% cut of all in-app transactions.

A key issue that will have to be resolved is how to define the relevant market, Miller said.

"Courts say, 'Well, every company has control over its brand,"' Miller said. "But you have to look at what other alternatives consumers can turn to consider whether there are competitive restraints on a dominant company."

Krishnamurthy said it's likely that more antitrust cases are filed against tech companies in the future as lawyers in the United States have seen similar cases in the European Union.

"All the allegations have really been rehearsed already in cases that have been brought in Europe by the Directorate-General for Competition," Krishnamurthy said. "The ... issue that hasn't come up yet in the U.S., but I'm expecting it to come up in some of the attorney general cases, ... is the way in which Google directs your search to other parties to which Google is affiliated with in some way."