Three US states are probing Google for the fees it takes from developers for in-app purchases and subscriptions. The three may file an antitrust lawsuit against the company early next year, people familiar with the matter said.
The attorneys general of Utah, North Carolina, and New York are the three states preparing a lawsuit, which has not yet been reported and will probably be filed in January next year, said people closely associated with the matter on conditions of anonymity as the matter isn’t public yet.
This antitrust lawsuit against Alphabet’s Google Inc. will be a fresh attack targeted on its business practices. A group of 38 attorneys general sued the search engine giant for abusing its dominance in online searches, on Thursday.
The investigation is going on Google’s app store practices that charge a 30% cut that its Google Play store takes from developers for in-app-purchases. In-app purchases allow users to subscribe to services or buy upgrades within apps. The company’s 30% cut drops down to 15% for users who subscribe to an app for a year or more than that. The investigation shows an objective that points towards attorneys general continuing to pressure dominant tech companies for conduct that damages competition in digital markets. In reply to a query on the investigation, Google said that Android allows users to use app stores other than Google Play. Sameer Samat, vice president of Android and Google Play said that “Android has always allowed people to get apps from multiple app stores”. “Each store is able to decide its own business model and consumer features. This openness means that even if a developer and Google do not agree on business terms the developer can still distribute on the Android platform”, he added.
Google has long been trying to give the company that cut, but several apps and services, including Netflix Inc and Spotify Technology SA, have been exceptions. Google decided in September that it will
be firm to take the fees and eventually remove apps from its store that fail to implement its payment system.