In the ever-tightening regulatory landscape against big tech companies, another major antitrust case was just announced. Over 36 states, as well as the District of Colombia, filed a massive antitrust lawsuit against Google (NASDAQ: GOOG) on Wednesday, specifically targeting the company’s Play Store, which it argued operated an illegal monopoly.
Back by attorney generals on both sides of the political aisle, the bipartisan case is just one of many that Google is facing in recent months. This particular antitrust case is led by the state of Utah and filed in the District Court of the Northern District of California. The lawsuit claims that Google blocks competition through contacts and technical barriers regarding its Android app store, which requires a 15% to 30% fee on all sales, depending on the user.
As per usual, Google responded quickly, saying that the company offers an open OS where customers can directly download apps from the websites of developers themselves. “It’s strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others,” wrote Wilson White, director of public policy at the tech company.
Despite this, attorneys remain optimistic that the antitrust case will build traction in time. Other Google cases include those regarding its dominance over online search advertising as well as its ad business. According to lawyers involved in the state case, they’ve been gathering research on Google for well over two years.
Google also faced a similar lawsuit over its Play Store in regards to Fortnite developer Epic Games, which filed a monopoly suit against both Google and Apple (NASDAQ: AAPL). Epic Games recently announced it would amend its lawsuit ahead of a crucial court date later this month which could see the case dismissed if it goes against them. How this particular case fares could be an indicator of how this new antitrust case will turn out.
The real question is whether this case has enough evidence to persuade a judge that Google has been running a monopoly, mainly by harshly discouraging competitors. The issue is that Android device users can still access apps through other marketplaces if they chose. These alternative marketplaces remain quite small, but it might be enough to skirt the definition of a pure monopoly and lead to dismissal from the judge.
Between all the ongoing cases Google is facing from regulators, most are scheduled for trial sometime around 2023. Although that’s still quite far down the road, investors can keep abreast of sooner court dates, including potential arguments for dismissal from the part of Google.
Google Company Profile
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. – Warrior Trading News
