Thursday 29 July 2021 12:01 am

Google hit with £920m UK lawsuit over ‘unlawful’ app store charges

Google has been slapped with a £920m class action lawsuit in the UK over claims charges on its Google Play Store are “excessive and unlawful”.

The claim, filed in the Competition Appeal Tribunal in London, alleges that the tech giant shuts down competition in its Play store and hits out at its 30 per cent surcharge for digital purchases.

The lawsuit, filed on behalf of roughly 19.5m UK users of Google’s Play Store, follows a similar £1.5bn claim made against Apple earlier this year.

The fresh complaint, which is seeking damages of up to £920m, argues that Google bundles the Play Store with other Google products and services and requires pre-installation and prominent placement of the store.

This has the effect of shutting down competition for app distribution on Android devices by steering the “overwhelming majority” of customers to Google’s store, it claims.

The claimants also argue that Google’s 30 per cent cut from app purchases is an “unlawful and unearned tax imposed on ordinary people without justification”.

A Google spokesperson said: “This lawsuit ignores the benefits and choice Android and Google Play provide as well as the competitive market in which we operate.”

According to Google, consumers and developers have a choice of competing app stores, while consumers are able to “sideload” apps or entire app stores allowing them to bypass Google Play completely.

The company added that 97 per cent of developers using Google Play pay no fees because their app is free and does not include in-app purchases.

‘Locked-in consumers’

The lawsuit, brough by consumer advocate Liz Coll, says that any person who made purchases of an app or digital content in the UK version of the Google Play store using an Android smartphone after 1 October 2015 is entitled to compensation.

“Google has done a great job in opening up access to all the benefits of smartphones for millions of people including me in the UK,” said class representative Coll.

“But while it claims to be an open system offering choice, in reality Google has shut out competition and locked consumers into its own app store and its own payment system.  

“Google is a gatekeeper to so many digital services, and it has a responsibility not to abuse that position and overcharge ordinary consumers. These hidden charges are unlawful, and Google’s customers deserve compensation, and better treatment from Google in future.”

The claim follows a similar suit filed against Apple in May, which also accused the iPhone maker of shutting out competition and generating “unlawfully excessive levels of profit”.

It will pile further pressure on Google, which is facing a string of regulatory investigations amid mounting concerns about anti-competitive practices by Big Tech.

In 2018 the EU fined Google €3.45bn for illegal practices regarding Android mobile devices, some of which involved the Google Play Store.

Last month the UK competition watchdog launched a market study into both Apple and Google over their dominance of the smartphone ecosystem.

A Google spokesperson said: “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 – 97 per cent 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 per cent of developers are subject to a 30 per cent service fee and only when they’re earning over $1m – 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.”