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Utah AG Leads Bipartisan Lawsuit against Tech Giant Google

Utah v. Google says Google Illegally Maintains an App Store Monopoly; Unfairly Edges Out Competition

SALT LAKE CITY – Today, Utah Attorney General Sean D. Reyes led a coalition of 37 attorneys general to file a lawsuit against Google in California. Utah v. Google alleges exclusionary conduct relating to the Google Play Store for Android. This antitrust lawsuit is the newest legal action against the tech giant, claiming illegal, anticompetitive, and/or unfair business practices.   Reyes and the States accuse Google of using its dominance to unfairly restrict competition with Google Play Store, harming consumers by limiting choice and driving up app prices. In addition to Utah, the named party in the filing, the lawsuit is co-led by AGs in New York, Tennessee, and North Carolina.

“Google’s monopoly is a menace to the marketplace. Google Play is not fair play. Google must be held accountable for harming small businesses and consumers. It must stop using its monopolistic power and hyper-dominant market position to unlawfully leverage billions of added dollars from smaller companies, competitors and consumers beyond what should be paid,” said Utah Attorney General Reyes. 

“Most consumers have no idea that for years Google has imposed unnecessary fees far beyond the market rates for in-app transactions, unlawfully inflating costs for many services, upgrades and other purchases made through apps downloaded on the Google Play Store. As a result, a typical American consumer may have paid hundreds if not thousands of dollars more than needed over many years,” Reyes added. “Utah and the other states in our coalition are fighting back to protect our citizens and innovative app developers—including many small businesses across America—from Google’s unlawful practices.”

According to the lawsuit, the heart of the case centers on Google’s exclusionary conduct, which substantially shuts out competing app distribution channels. Google also requires that app developers that offer their apps through the Google Play Store use Google Billing as a middleman. This arrangement, which ties a payment processing system to an app distribution channel forces app consumers to pay Google’s commission – up to 30% – on in-app purchases of digital content made by consumers through apps that are distributed via the Google Play Store. This commission is much higher than the commission that consumers would pay if they had the ability to choose one of Google’s competitors instead. The lawsuit alleges that Google works to discourage or prevent competition, violating federal and state antitrust laws. Google had earlier promised app developers and device manufacturers that it would keep Android “open source,” allowing developers to create compatible apps and distribute them without unnecessary restrictions.  The lawsuit says Google did not keep that promise. 

Google Closed the Android App Distribution Ecosystem to Competitors

When Google launched its Android OS, it originally marketed it as an “open source” platform. By promising to keep Android open, Google successfully enticed “OEMs”—mobile device manufacturers such as Samsung—and “MNOs”—mobile network operators such as Verizon—to adopt Android, and more importantly, to forgo competing with Google’s Play Store at that time. Once Google had obtained the “critical mass” of Android OS adoption, Google moved to close the Android OS ecosystem—and the relevant Android App Distribution Market—to any effective competition by, among other things, requiring OEMs and MNOs to enter into various contractual and other restraints. These contractual restraints disincentivize and restrict OEMs and MNOs from competing (or fostering competition) in the relevant market. The lawsuit alleges that Google’s conduct constitutes unlawful monopoly maintenance, among other claims.

In aid of Google’s efforts discussed above, the AGs allege that Google also engaged in the following conduct, all aimed at enhancing and protecting Google’s monopoly position over Android app distribution:

  • Google imposes technical barriers that strongly discourage or effectively prevent third-party app developers from distributing apps outside of the Google Play Store. Google builds into Android a series of security warnings (regardless of actual security risk) and other barriers that discourage users from downloading apps from any source outside Google’s Play Store, effectively foreclosing app developers and app stores from direct distribution to consumers.
  • Google has not allowed Android to be “open source” for many years, effectively cutting off potential competition. Google forces OEMs that whish to sell devices that run Android to enter into agreements called “Android Compatibility Commitments” or ACCs. Under these “take it or leave it” agreements, OEMs must promise not to create or implement any variants or versions of Android that deviate from the Google-certified version of Android.
  • Google’s required contracts foreclose competition by forcing Google’s proprietary apps to be “pre-loaded” on essentially all devices designed to run on the Android OS, and requires that Google’s apps be given the most prominent placement on device home screens.
  • Google “buys off” its potential competition in the market for app distribution. Google has successfully persuaded OEMs and MNOs not to compete with Google’s Play Store by entering into arrangements that reward OEMs and MNOs with a share of Google’s monopoly profits.
  • Google forces app developers and app users alike to use Google’s payment processing service, Google Play Billing, to process payments for in-app purchases of content consumed within the app. Thus, Google is unlawfully tying the use of Google’s payment processor, which is a separate service within a separate market for payment processing within apps, to distribution through the Google Play Store. By forcing this tie, Google is able to extract an exorbitant processing fee as high as 30% for each transaction and which is more than ten times as high as the fee charged by Google’s competitors.

This effort is led by Utah Attorney General Sean D. Reyes, New York Attorney General Letitia James, North Carolina Attorney General Josh Stein and Tennessee Attorney General Herbert Slatery III. States joining the lawsuit include Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Idaho, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and West Virginia.

Click here to see Frequently Asked Questions regarding the lawsuit.

Click here to see the text of the Utah v. Google lawsuit.

Google

Attorney General Reyes Statement on Google Multistate Investigation and U.S. Department of Justice Antitrust Filing

FOR IMMEDIATE RELEASE
October 20, 2020

JOINT ATTORNEYS GENERAL STATEMENT ON THE U.S. DEPARTMENT OF JUSTICE ANTITRUST FILING AND THE MULTISTATE INVESTIGATION INTO GOOGLE
 

SALT LAKE CITY — Today, the U.S. Department of Justice filed an antitrust lawsuit against Google. Utah has not joined the Department of Justice lawsuit and is instead studying a separate action with the multistate coalition. 

Attorneys General from the states of Utah, Iowa, Colorado, Arizona, Tennessee, New York, North Carolina, and Nebraska released the following statement regarding today’s antitrust filing by the U.S. Department of Justice and the multistate investigation into Google: 

“Over the last year, both the DOJ and state attorneys general have conducted separate but parallel investigations into Google’s anticompetitive market behavior. We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues. This is a historic time for both federal and state antitrust authorities, as we work to protect competition and innovation in our technology markets. We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. We would then litigate the consolidated case cooperatively, much as we did in the Microsoft case.”

Utah Attorney General Sean D. Reyes added the following statement: 
 
“We applaud AG Barr and his team of dedicated DOJ lawyers and legal professionals for their work. We support them and understand why they filed sooner than our multistate case. DOJ began its investigations significantly prior to our multistate efforts so it has always been ahead in terms of timing. Further, our multistate case may address additional issues beyond the scope of the DOJ complaint.”
 
“We have been working closely with DOJ in our investigation, and we appreciate the cooperation and assistance it has given us,” Attorney General Reyes said.  “We anticipate making a decision regarding our own multistate case in the very near future and look forward to continuing to collaborate closely with the DOJ on this and many other matters.”
 

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Read the U.S. Department of Justice’s lawsuit here.

Attorney General Reyes Urges Google and Apple to Ensure Contact Tracing Apps Protect Consumer Privacy

FOR IMMEDIATE RELEASE
June 17, 2020

“I WILL CONTINUE TO AGGRESSIVELY ADVOCATE FOR THE PRIVACY AND PROTECTION OF UTAHN’S PERSONAL DATA.” —ATTORNEY GENERAL REYES
Attorney General Reyes Joins Bipartisan Coalition to Demand Apple and Google Ensure Consumer Privacy

SALT LAKE CITY – As the COVID-19 pandemic continues, Utah Attorney General Sean D. Reyes is demanding Google and Apple ensure all contact tracing and exposure notification apps related to COVID-19 adequately protect consumers’ personal information.
 
Specifically, Attorney General Reyes and a bi-partisan coalition of 39 state attorneys general are urging Google and Apple to guarantee that such apps, when available to consumers, are affiliated with a public health authority and removed from Google Play and the App Store once no longer needed by public health authorities.
 
Today, in a letter sent to the Chief Executive Officers of Apple and Google, the attorneys general acknowledge that while digital contact tracing and exposure notification tools are valuable in understanding the spread of COVID-19 and assisting public health authorities, these same technologies pose a risk to consumers’ privacy.
 
“We understand the value of using technology to limit exposure to COVID-19, but the personal information of Utahns must be safeguarded in the process. I believe we can find that balance. But, until we do, I will continue to aggressively advocate for the privacy and protection of Utahn’s personal data,” said Attorney General Reyes.
 
The coalition expressed concern regarding contact tracing and exposure notification apps available to consumers in Google Play and the App Store, particularly the “free” apps that utilize GPS tracking, offer in-app purchases, and are not affiliated with any public health authority or legitimate research institution.
   
To protect consumers without interfering with public health efforts to monitor and address the spread of COVID-19, the letters ask Google and Apple to:

  1. Verify that every app labeled or marketed as related to contact tracing, COVID-19 contact tracing, or coronavirus contact tracing or exposure notification is affiliated with a municipal, county, state or federal public health authority, or a hospital or university in the U.S. that is working with such public health authorities;
  2. Remove any app that cannot be verified as affiliated with one of the entities identified above; and
  3. Pledge to remove all COVID-19 / coronavirus related exposure notification and contact tracing apps, including those that utilize the new exposure notification application program interfaces (APIs) developed by Google and Apple, from Google Play and the App Store once the COVID-19 national emergency ends. In addition, the attorneys general asked Google and Apple to provide written confirmation to their offices once the apps have been removed or an explanation why removal of a particular app or apps would impair the public health authorities affiliated with each app.


As of today, Utah has 15,344 confirmed cases of COVID-19, 8,552 patients have recovered and there have been 149 deaths.
 
Read a copy of the letter to Google and Apple here.
 
The attorneys general in Nebraska and Oregon sponsored the letter and are joined by attorneys general in Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.
 

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State AGs, Department of Justice Meet to Discuss Google Probe

February 5, 2020

Yesterday, Utah Attorney General Sean D. Reyes joined the U.S. Department of Justice and fellow attorneys general to discuss coordinating efforts in the Google probe, which includes a bipartisan group of the nation’s attorneys general.

This follows the Department of Justice’s announcement in July 2019 that it was opening a broad antitrust investigation into “market-leading online platforms” – including Facebook, Amazon, and Google – and the September 2019 announcement by nearly all state attorneys general on plans to investigate Google’s overarching control of online advertising markets.

“We’re working well together and trying to make sure that there aren’t redundancies,” told Reuters outside the Justice Department. “We’re hoping to go as quickly as we possibly can but I don’t have a specific timetable.”

Read more here.

AG Reyes Statement on UK’s Assessment of Google in Competition and Markets Authority Report

FOR IMMEDIATE RELEASE
December 19, 2019

SALT LAKE CITY – This week, the United Kingdom’s Competition and Markets Authority (CMA) released their Online Platforms and Digital Advertising Market Study Interim Report, which assesses the market power of Google and other online platforms. Utah Attorney General Sean D. Reyes issued the following statement:

“The CMA’s interim report reflects a growing concern over Google’s business practices and our office applauds the efforts of many other competition authorities around the world to examine the dominance and conduct of tech giant Google in online markets. As a leader in the multi-state, bipartisan coalition of 51 attorneys general, I pledge to closely follow the facts we discover in our own investigation to see if Google has harmed competition, undermined consumer choice, stifled innovation, or violated users’ privacy and trust.”

In September, Attorney General Reyes and 49 other attorneys general launched a bipartisan investigation of tech giant Google’s business practices in accordance with state and federal antitrust laws. The coalition announced plans to investigate Google’s overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers. This investigation is ongoing.

To view a copy of the report, click here

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Utah Attorney General Reyes Joins 50 Attorneys General in Multistate Google Investigation

FOR IMMEDIATE RELEASE
September 9, 2019

UTAH ATTORNEY GENERAL REYES JOINS 50 ATTORNEYS GENERAL IN GOOGLE MULTISTATE BIPARTISAN ANTITRUST INVESTIGATION 
 

SALT LAKE CITY – Utah Attorney General Sean D. Reyes today announced that Utah is joining the attorneys general in 48 states, Washington D.C. and Puerto Rico in a multistate, bipartisan investigation of tech giant Google’s business practices in accordance with state and federal antitrust laws.

The bipartisan coalition announced plans to investigate Google’s overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers. Legal experts from each state will work in cooperation with Federal authorities to assess competitive conditions for online services and ensure that Americans have access to free digital markets.

“Now, more than ever, information is power, and the most important source of information in Americans’ day-to-day lives is the internet. When it comes to internet search, Google is-and has been-the 90% market share leader.” said Attorney General Reyes. “There is nothing wrong with a business becoming the dominant player if it does so fairly, but we are concerned Google’s dominance has been achieved and maintained through business practices designed to thwart competition and prevent new alternatives from ever existing. If true, such practices have undermined consumer choice, stifled innovation, violated users’ privacy, and impermissibly put Google in control of the flow and dissemination of online information.

“At times, there is a fine line between aggressive and abusive business practices. This investigation will tell us if Google has crossed that line. We intend to closely follow the facts we discover in this case and proceed as necessary. I raised these issues with the FTC several years ago but didn’t have the resources as a single state to pursue this behemoth. I am glad so many of my colleagues have seen the wisdom and importance of pursuing this investigation.”

Past investigations of Google uncovered violations ranging from advertising illegal drugs in the United States to now three antitrust actions brought by the European Commission. None of these previous investigations, however, fully address the source of Google’s sustained market power and the ability to engage in serial and repeated business practices with the intention to protect and maintain that power.
 

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