FFor the Internet company Google, things are rock solid at home: 36 US states filed a lawsuit against the company in a federal court in California on Wednesday. The accusation is: Violation of competition laws. Google should, according to the application, with its App Store for the Operating system Disadvantaged Android developers for mobile apps.
The accusation is not new: Epic Games, the development studio behind the popular game "Fortnite", was brought to court with the same accusation against Apple and Google. But the new process of the states is far more serious: If the competition watchdogs win the process, the entire current system of app stores on mobile devices would be called into question.
What's more, Google could lose some of its control over its version of Android if the judges decided that competing offers would have to run ex-factory on the devices in the future.
The large US Internet companies seemed almost inviolable in the past decade, so successful were they in all their business areas. But in the past twelve months there have been proceedings against the corporations - not only in the EU, but also for the first time in the home market of the USA. The Trump administration initiated proceedings against Google and Facebook as early as 2020. Donald Trump and the corporations did not shy away from reassuring each other of their mutual dislike.
Biden called in a tough critic
But also the newly elected democratic U.S. government under Joe Biden is less closely allied with the corporations on the west coast than, for example, the Democratic administration under Barack Obama. He had appointed several top corporate executives to his government team.
Biden, on the other hand, appointed the 32-year-old lawyer Lina Khan as head of the FTC competition oversight, who already made her critical view of the market power of corporations clear in articles in scientific journals during her studies in 2017. There are currently no fewer than four proceedings against Google pending in US courts:
In October 2020, the Justice Department and 14 states filed lawsuits. The accusation: Google has established an illegal monopoly in the field of mobile search by agreeing with Apple and Samsung, among others, to set Google search as the standard on manufacturers' devices.
And in December, 38 US states filed a lawsuit against Google, suspecting that Google was violating competition laws in Internet searches by preferring its own services.
Third: Also in December, 15 US states filed a lawsuit against Google, alleging that Google was manipulating online auctions for Internet advertising and had secured its own dominance through a deal with Facebook. And number four is the most recent lawsuit from the 36 states.
The hail of lawsuits shows how US competition watchdogs are currently taking action against the dominance of the giants. It is noteworthy that in many cases the prosecutors general of various states are the plaintiffs. The latest lawsuit is brought by the states of Utah, North Carolina, Tennessee, New York, Arizona, Colorado, Iowa and Nebraska.
Epic Games is one of the largest Internet companies in North Carolina, many app developers are also based in New York, Utah and Arizona, and many of the states are governed by Republicans - so the states have more than the US federal government own interest in breaking the dominance of the giants.
Facebook was able to avert a similar lawsuit
The most recent case specifically concerns that Google a revenue share of 30 percent from successful developers that their Apps distribute via Google's Play Store. This involvement appears to app developers such as Epic Games to be inappropriate, which is why various proceedings are now pending against Google in the same matter.
The US federal judge James Donato will decide at the US federal court in San Francisco. The first case by Epic Games is scheduled for negotiation from April 2022, but Donato may summarize the case.
Google defends itself against the allegations in one current blog post, in which the group points to the existing competition in the market for apps - on the one hand by Apple's competitive offer, on the other hand by alternative app stores that Google, unlike Apple, allows on its devices. In addition, according to Google, over 99 percent of developers in the Play Store would either only pay a reduced rate of 15 percent or nothing at all.
Whether the lawsuits of the states against Google and Co are the right way to break their dominance is also questionable: At the end of June, Facebook was able to record its first success, as a court in New York unceremoniously dismissed a lawsuit by various states, the reason: The States had not sufficiently proven that Facebook was actually dominant in its market segment.
The decision shows the problem of the competition guardians: The competition between the corporations is pronounced, so that it is difficult to prove classical monopolies at all.
The fact that the corporations still exercise market power through their vertical integration and their platforms is simply not enough in traditional competition law to get judgments against them. That's why Joe Biden's government has already announced that it wants to revise competition law. In the future, its limits could be broader in order to do justice to the behavior of the Internet giants.