Google set to defend £1.2bn UK lawsuit over ‘excessive’ app download charges

Google is preparing to defend a £1.2bn lawsuit over claims that millions of UK consumers have been overcharged for downloads on Android smartphones for more than a decade, in the latest legal challenge to the market power of Big Tech.

Barring a last-minute settlement, a seven-week trial is due to begin in London this week in a class action case against Google financed by Fortress Investment Group, backed by Abu Dhabi’s Mubadala investment arm.

About 20mn consumers could be in line to receive about £60 each on average if the antitrust claim is successful.

The case alleges Alphabet, Google’s parent company, has choked off competition and levied “excessive” charges on software downloaded from the Google Play Store for its Android operating system since 2015.

Google denies the claim that it has engaged in any anti-competitive conduct. In its legal defence, it contends that Android offers more choice than rivals while the Play Store helps protect customers from cyber security threats.

The lawsuit follows a legal breakthrough in a similar case last year against Apple, which the Competition Appeal Tribunal found had imposed unfair charges on downloads from its App Store.

Apple is challenging the judgment and the Court of Appeal is due to hear the case next year.

Google in August agreed to pay £260mn to settle a related UK case brought on behalf of thousands of software developers over commissions it imposes on Play Store downloads.

The claimants in the forthcoming trial are led by “class representative” and consumer policy specialist Liz Coll, who contends that excessive charges levied on software developers have been passed on to everyday users through higher prices.

Coll told the FT that many consumers were unaware that Google had charged commission fees as high as 30 per cent on mobile software, such as gaming, dating and music-streaming apps.

In 2023, Google lost a high-profile case brought in California by Epic Games, maker of popular video games such as Fortnite, which successfully argued that Google’s exclusive deals and revenue-sharing arrangements with smartphone makers, network operators and game developers were illegal.

The San Francisco judge ordered Google to open its Android operating system to rivals so they can create their own app marketplaces and payment systems. After a series of appeals, Google and Epic agreed to settle the case in March this year.

Also in 2023, Google paid $700mn to settle a US antitrust lawsuit brought by multiple states that alleged that it conspired to shut out rival payment systems and then overcharge customers.

Coll is calling for compensation for subscriptions and in-app purchases such as gaming add-ons, which have become an important source of revenue for tech groups.

“Of course there’s a case that it’s a drop in the ocean for the company, but I think there’s something really valid and important in people knowing that they can’t do whatever they want and that there’s recourse to some kind of redress,” Coll said. “I think you can make dents in some parts of the empire.”

The claim alleges that Google imposed barriers on rival app stores and forced mobile phone manufacturers to preinstall the Play Store on new devices.

The £1.2bn figure was the claimants’ estimate of possible damages, based in part on the tribunal’s findings in the case against Apple, Coll added.

Any compensation awarded would depend on several factors, including how much of the alleged “overcharge” the tribunal deems to have been passed on from developers to consumers.

Google says the commissions it charges have reduced over time.

In its defence of the claim filed with the tribunal, the company also noted that the vast majority of Play Store apps were free and only about 3 per cent of the largest app developers paid any fee.

It argued that a proliferation of unverified new app stores and payment methods on Android could harm customers by increasing scams and fraud.

“Android gives people more choice than any other mobile platform in deciding which apps and app stores they use, with Play offering some of the lowest fees in the market,” Google said. “This lawsuit ignores that choice as well as the competitive market in which we operate, and we will defend our services vigorously.”