Google app charges subject of new UK class action claim
Connected Consumers round up #18
This edition of Connected Consumers includes a story involving me - last week I launched a class action in the UK courts on behalf of consumers who have made purchases in the Google Play Store. As the proposed class representative, I am representing an estimated 19.5 million UK consumers who have overpaid for apps, in app purchases or subscriptions in the Play Store due to the excessive 30% fee charged by Google. As Google have effectively closed off the app store market on Android phones to other competitors, the claim states that they are abusing their dominance by charging 30% on digital purchases – a fee level that bears little relation to the costs of running an app store or processing payments. The total estimated damages based on publicly available data are £920million but this will be further refined as more information becomes available.
The case has been brought on a similar basis to Dr Rachael Kent’s class action against the Apple app store’s unfair and excessive charges in May 2021, and we are working with the same law firm. Although the practices are very similar, the way in which each company has closed off the market is different. Apple clearly has a closed operating system and app distribution store for iphones and ipads. Google on the other hand, may not have a particularly big take up of its Pixel handsets, but does run the Android operating system behind almost all other non-iphone smart phones – eg Samsung, Huawei, LG or HTC. Globally, about 70% of consumers own ‘non-iphones’ and the vast majority, upwards of 95% worldwide are run on the Google Android operating system. While the UK used to have a higher proportion of iphone users, it is now roughly 50/50 with Android, with Samsung devices the most popular. In theory, the Android operating system is more open and other app stores are allowed. However, in practice, through a network of different technical and contractual restrictions imposed by Google, it is really difficult for other app stores to effectively compete, and consumers are steered towards the Play Store. There, they face the a 30% fee on almost all of their digital purchases.
Collective consumer actions are relatively new to the UK system, although those of you based in other countries will be more familiar with them. They are most helpful in cases like this where a large number of people have been overcharged but where pursuing individual damages would not be feasible. I’m so pleased to have finally launched this case after months of preparation and to be able to use enforcement tools to get things put right for consumers. And, although some of the technical and contractual limitations are complicated, at its essence the case is simple:
Shutting out competition and charging an excessive and unjustified surcharge on apps breaks competition law and consumers should be compensated.
You can read more about the case on these links and I’ll keep you updated as it progresses:
https://inews.co.uk/news/technology/android-users-legal-action-google-1124828
https://www.appstoreclaims.co.uk/Google
Short takes:
Do the huge profits of tech companies protect them from regulation? This short piece looks at whether even the biggest fines barely making a dent in companies’ profits, and considers their ability to buy up competitors, talent and invest in PR which enables them to carry on with business-as-usual: https://www.axios.com/tech-money-profits-shield-federal-regulation-e905df64-86b1-43d5-975f-1dc352111010.html
World’s first 3D printed pedestrian bridge has opened in Amsterdam: oh, and a robot cut the ribbon leaving the Queen of the Netherlands to look on and wonder how much more of a monarch’s job can be automated: https://www/.turing.ac.uk/news/world-first-3d-printed-steel-smart-bridge-opens-pedestrians-amsterdam
What would it be like if you subscribed to all your gadgets and never actually owned them? Renting furniture, clothes and transport has gone mainstream as subscription and peer-to-peer services have become more user-friendly and cheaper. There’s lots of advantages in decluttering like this and just using things as and when they’re needed, but for digital products there are drawbacks. With less control or rights over software and usage, consumers may find themselves with gadgets that are no more than worthless shells: https://gizmodo.com/in-2030-you-wont-own-any-gadgets-1847176540
Thanks so much for reading Connected Consumers. Since I launched in January, I’ve really enjoyed connecting with you all and writing about the things that spark my interest. I also love learning about the things that resonate with you too so please carry on sending comments or messages about any stories that catch your eye, or that you’d like to hear more about. I’m taking a break for the summer but will be back in September. Until then, rest well and have a good summer, Liz.