Google customers win class-action status in lawsuit over app store prices

Next summer, courts will decide whether Google is guilty of “misleading” millions of Google Play users by warning them against using any other app stores or services to download apps.

A judge this week granted class-action status to antitrust litigation that now covers 21 million Google Play customers in 12 states—Alabama, Georgia, Hawaii, Illinois, Kansas, Maine, Michigan, Ohio, Pennsylvania, South Carolina, Wisconsin, and Wyoming—and five US territories, including American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the US Virgin Islands. The lawsuit claims that Google’s misleading warnings led millions of customers nationwide to pay “artificially inflated” prices for apps they could have downloaded cheaper elsewhere.

Last year, dozens of state attorneys general sued Google on these same antitrust grounds. Those state enforcers alleged that Google made it impossible for other app stores to compete, and the company had a monopoly on Android apps. The legal teams for the customers suing are now joining forces with the states suing; if the customers win, Google owner Alphabet Inc. could be on the hook for an estimated $4.7 billion in damages from the class-action suit alone.

Initially, Google had opposed the class-action designation, claiming in part that each of the individual plaintiffs suing couldn’t demonstrate actual harm, potentially allowing uninjured parties to join the class action. This week, US District Judge James Donato disagreed with Google in his order granting class-action status.

“In effect, Google demands that each class member individually prove an injury before certification may be granted,” Donato wrote in his order. “The law provides otherwise. It is true that a class may not be certified when it would be so overinclusive that substantial numbers of uninjured people would populate it. Google has not shown this is a concern here.”

Plaintiffs argued that the designation was appropriate because Google Play’s allegedly “monopolistic” business practices “affected all of the prices set by the developers and paid by consumers to Google.”

On Monday, a Google spokesperson told Reuters, "We're evaluating the ruling, and after that, we'll assess our options." A Google spokesperson declined further comment to Ars. Lawyers representing the customers suing didn’t immediately respond to Ars’ request for comment.

The trial deciding the class-action litigation is set to start in June 2023.

Experts clash over Google Play price models

To help the judge decide if the lawsuit is best settled with individual plaintiffs or as a class action, both sides provided expert testimony. This testimony largely focused on whether Google Play app store customers actually paid higher prices across the board.

Google disagreed with so much of the opinion of the plaintiffs' expert, Hal J. Singer, that the company asked Donato to exclude his testimony. Google argued in part that Singer used methods to calculate prices in the Google Play store that Google’s expert, Michelle M. Burtis, had “never seen before.”

According to Google, another alleged flaw in Singer's analysis was that Singer failed to account for real-world data impacting how developers make decisions to raise or lower prices based on app store fees. Burtis claimed that Singer’s analysis predicted that all developers would have lowered prices if Google Play lowered its fees, but Burtis’ analysis of how developers actually responded when fees were lowered showed that “only a tiny fraction of developers whose service fees Google reduced then reduced prices.”

Ultimately, Donato denied Google’s motion to exclude Singer’s testimony, writing in his order that Google’s argument against Singer’s methodology “is the stuff of cross-examination and not exclusion.” Further, Donato said, “it is not necessarily ‘surprising’ for expert opinions to be based on methods that are new and not been the subject of peer review.”

Neither Burtis nor Singer responded to Ars’ requests for comment.