Google sued for excessive and unlawful charges on its Google Play Store
Today, Hausfeld filed a claim in the Competition Appeal Tribunal against Google on behalf of an estimated 19.5 million eligible UK users of smartphones and tablets running on Google’s Android operating system. Estimated damages run up to £920 million.
The claim alleges that Google unfairly restricts consumers from accessing potential competition from other app distributors, by requiring smartphone manufacturers to pre-install a bundle of Google’s proprietary apps and services including the Google Play Store as well as imposing other contractual and technical restrictions. The vast majority of Android smartphone and tablet users in the UK are thought to depend upon the Google Play Store for their access to apps.
The overwhelming majority of customers are steered to the Google Play Store, and therefore to Google’s own payment processing system, which then typically charges a 30% commission on every digital purchase which goes straight to Google.
The claim argues this practice is anti-competitive and unlawful, and that Google would be unable to charge customers such excessive and unfair commission if its devices were genuinely open to competitors, and alleges this conduct violates section 18 of the UK Competition Act 1998 and Article 102 of the Treaty on the Functioning of the European Union.
The opt-out representative action is brought by consumer champion Liz Coll, formerly Head of Digital at Consumers International and prior to that a senior executive at Citizens Advice, on behalf of eligible UK app purchasers. She argues that ordinary Google Play Store customers are the direct victims of the company’s anti-competitive behaviour, since they foot the bill, and are therefore entitled to compensation.
Liz Coll, the proposed class representative in the action, said:
“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. 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."
Lesley Hannah, Partner at law firm Hausfeld & Co LLP, who is leading the litigation, said:
“In Britain and elsewhere, Google dominates the Android smartphone market and uses that dominance to restrict competition and charge excessive and unfair app store fees that are out of all proportion to the cost of providing those services.”
“Thankfully, we have robust competition laws to protect consumers, and a collective proceedings regime to vindicate their rights, and we are looking forward to working with Liz Coll in holding Google to account for its unlawful conduct.”
Ms Coll is advised by a consultative group consisting of Sir Gerald Barling, a retired judge and formerly the President of the UK Competition Appeal Tribunal; Dr Christine Riefa, a leading academic specialising in consumer law; and Aidene Walsh, an expert with 20 years’ experience in the payments industry.
Any person who, at any point from 1 October 2015, made purchases of an app or digital content, services or subscriptions within an app (excluding Google apps) in the UK version of the Google Play Store using an Android smartphone or tablet on which the Google Play Store was pre-installed, is eligible to be included within the claimant class. The Google Play Store is pre-installed on nearly all Android smartphones and tablets in the UK.
Purchasers who are interested in finding out more about the claim and signing up for regular updates should visit www.appstoreclaims.co.uk.
Affected app purchasers will not pay costs or fees to participate in this legal action, which is being funded by Vannin Capital, a global litigation funder. The action is also insured, which means that class members have no financial risk in relation to the claim.
Liz Coll is represented by Hausfeld & Co LLP, and Mark Hoskins QC and Aaron Khan of Brick Court and Ronit Kreisberger QC and Michael Armitage of Monckton Chambers.
The claim has been reported widely in the news:
Dow Jones Newswire
Global Competition Review (subscription only)
Global Legal Post
Law360 (subscription only)
Law.com (subscription only)
The Telegraph (subscription only)
Conal Walsh / Amy Murphy / Andreas Grueter, Palatine Communications
Notes for Editors
About the apps affected
The legal claim applies to most popular apps on the Google Play Store, including Roblox, Candy Crush Saga, Tinder and many others that require payment at point of download, subscription payments, or allow for in-app purchases. It does not apply to apps providing “physical goods or services that will be consumed outside of the app”. These include Deliveroo and Uber, which are not required to use Google’s payments system or pay Google the disputed 30% commission.
About the proposed class representative
Ms Coll is an independent consultant focusing on consumer issues in the field of technology, e-commerce, data protection and privacy, and the impact of platforms like Google on consumers’ access to choice, redress and fair treatment. She was formerly Head of Digital at Consumers International, and Digital Policy Manager at Citizens Advice, where she worked on projects which were influential in shaping regulatory guidance for consumer protection in digital markets. She has represented consumer interests at national and global policy forums including the OECD and the G20.
The background to the case against Google
The action coincides with increased public concern about Google’s anti-competitive practices.
In 2018, the European Commission fined Google €4.34 billion for illegal practices regarding Android mobile devices, some of which involved the Google Play Store. Last year, a US Congressional report found that Google’s Play Store “now functions as a gatekeeper, which Google is increasingly using to hike fees and favor its own apps”. And earlier this year, 36 US States and the District of Columbia brought a legal claim alleging that Google unlawfully monopolizes the app distribution and in-app payments markets by using a variety of contractual and technical restrictions to entrench the power of its Google Play Store.
In June 2021, the UK Competition and Markets Authority announced that it is conducting a market study into mobile ecosystems in the UK, focusing on whether Apple and Google’s “effective duopoly” over the supply of operating systems (iOS and Android)” and “app stores (App Store and Play Store) … could be resulting in consumers losing out across a wide range of areas”.