Google LLC owns and licenses software to manufacturers of smartphones and tablets, called Original Equipment Manufacturers (OEMs). This software includes the Android operating system (Android OS). Google LLC also developed and owns the Australian Google Play Store and Google Play Billing, the payment solution used by Australian Android users when purchasing Android apps and in-app digital content from Android apps distributed through the Google Play Store.
Google Asia Pacific is the Google contracting entity in relation to Android apps distributed through the Google Play Store in Australia. Google Australia, a subsidiary of Google LLC, accepts and facilitates the processing of payments for Google Play Store app and in-app purchases in Australia, and charges a 30% commission to Android app developers for these purchases, or in some limited cases, 15%.
Alphabet Inc. is the ultimate holding company of all three entities, and is one of the largest companies in the world by market capitalization.
- Google had a substantial degree of power in the markets for the purchase of Android apps from the Australian Google Play Store (the Australian Android Mobile App Distribution Market), the market for the supply of licences for mobile operating systems (the Mobile OS Licensing Market), and the market for the supply of services to Android app developers for accepting and processing payments for the purchase of Android Apps and digital content within an Android App (the Australian Android In-App Payment Solutions Market).
- Google was able to impose terms on OEMs and Android app developers which restricted the ability of those developers to offer other means of Android app distribution, and payment for Android apps and in-app digital content from Android apps.
- As well, Google was able to charge commission rates on those Android app and in-app purchases over and above what it would otherwise have been able to charge in a competitive market.
- By the above conduct, Google, among other things:
- gave effect to provisions in a contract which, by imposing restrictive terms on OEMs and Android app developers, prevented or hindered those developers from distributing Android apps other than through the Google Play Store and from using payment solutions other than those controlled by Google; and
- supplied services to app developers for the distribution of Android apps on the condition that those developers not use payment solutions other than those controlled by Google for payments of Android app purchases via the Google Play Store and of in-app purchases from Android apps distributed via the Google Play Store.
- The above conduct had the purpose, effect or likely effect of substantially lessening competition in the following markets:
- the Australian Android Mobile App Distribution Market; and/or
- the Australian Android In-App Payment Solutions Market,
in contravention of ss. 45, 46 and 47 of the Competition and Consumer Act 2010 (Cth); and
- This conduct resulted in higher prices for users who purchased apps and in-app digital content through the Australian Google Play Store.
- The above conduct also was, in all the circumstances, unconscionable in contravention of s. 21 of the Australian Consumer Law.
The proceeding seeks compensation for eligible purchasers and App Developers from Google for the excess price charged.
- Maurice Blackburn Media Statement
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