Google is charging people for their digital purchases in its Play Store through an “unfair and excessive” manner, according to a new legal lawsuit filed against the tech giant.
On behalf of 19.5 million Android phone users in the UK, the legal action is seeking up to $1 billion from Google.
The lawsuit has been filed with the Competition Appeal Tribunal in London by former Citizens Advice digital policy manager Liz Coll, who’s claiming that the 30 percent cut Google takes from digital purchases on its app store is unjust.
“Google created the Android app marketplace and controls it with a vice-like grip,” Coll said, explaining that Google has went against UK and European competition law.
In response, Google defended its case by issuing a statement saying that “Android gives people more choice than any other mobile platform in deciding which apps and app stores they use, in fact most Android phones come preloaded with more than one app store.”
“We compete vigorously and fairly for developers and consumers,” Google noted, mentioning that 97 percent of developers on Google Play don’t pay any service fee at all, which means their apps are free to consumers.
“Less than 0.1 percent of developers are subject to a 30 percent service fee and only when they’re earning over one million dollars, that fee is comparable with our competitors and allows us to constantly reinvest in building a secure, thriving platform that benefits everyone who uses it,” Google highlighted.
The trillion-dollar tech giant recently decreased its service charge to 15 percent for all app creators making less than $1 million, with only a small group of the most valuable app developers paying 30 percent.
According to Google, the charge allows the company to “constantly reinvest in building a secure, thriving platform that benefits everyone who uses it.”
The $1 billion lawsuit is the latest incident in an ongoing battle with both Apple and Google, as they’re currently under intense scrutiny following Epic Games’ legal action.
Epic argued that the Play Store and Apple’s app store policies and management were against producing fruitful competition, as the American video game and software developer described the two tech giants as “monopolistic.”
For the past years, major tech firms have been in hot water over anti-trust and monopoly charges.
In 2020, ten U.S. states led by Texas, brought legal action against Google over its ad revenue practices, accusing Google with illegally collaborating with the popular social network Facebook.
“As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat,” the lawsuit stated.
“This Goliath of a company is using its power to manipulate the market, destroy competition, and harm you, the consumer,” Texas Attorney General Ken Paxton said regarding Google through a video released on Twitter.
The key question many analysts have been asking is to what extent Google should be given the freedom to charge its services as it sees fit, no matter what the cost is to other developers.