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Google hit with £920 million lawsuit over 30% Play Store tax

UK legal firm has branded the ‘app tax’ imposed on consumers as 'unlawful'

Google is facing legal challenges in the UK over its allegedly monopolistic Play Store practices, less than three months after Apple was hit with a similar claim.

The new lawsuit, filed by legal firm Hausfeld & Co LLP on behalf of 19.5 million British Android users, is demanding up to £920 million in damages over the 30% Play Store ‘app tax’ imposed on consumers, branding the practice as “unlawful”.

It also calls out Google dominance over the app market, accusing it of having “shut out competition and locked consumers into its own app store and its own payment system”.

The Play Store comes pre-installed on most Android smartphones and tablets in the UK.

Consumer tech and digital policy consultant Liz Coll, who is a class representative in the action, said that Google controls the Android app marketplace “with a vice-like grip”, describing the tech giant as a “gatekeeper to so many digital services”.

“Customers are herded towards the Google Play Store, and once there, have no option but to pay a 30% fee whenever they buy an app or make an in-app purchase. Competing app stores, which could give the same service at a fraction of the price, never get a look in,” she said.

According to Coll, Google “has a responsibility not to abuse that position and overcharge ordinary consumers”.

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“These hidden charges are unlawful, and Google’s customers deserve compensation and better treatment from Google in future,” she added.

IT Pro has contacted Google for comment.

The claim states that anyone who, since 1 October 2015, had purchased 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 entitled to a portion of the proposed £920 million compensation from Google.

In May, a £1.5 billion class-action lawsuit filed in the Competition Appeal Tribunal in London claimed that Apple overcharged 19.6 million iPhone and iPad users for App Store purchases, which also include a 30% ‘app tax’. Prior to that, the ‘app tax’ has also been the subject of a CMA investigation, which was launched in March and is expected to last until September 2021.

Apple's marketplace policies have come under intense scrutiny following a disagreement with Fortnite developer Epic Games. The game developer and publisher filed a complaint to the European Commission, accusing the tech giant of “abusive conduct” that breaches competition laws. It also filed a lawsuit against the company in the US after its Fortnite game was removed from the App Store.

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