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Google is facing £920million legal action in the UK, millions of Android users could be owed

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Google is facing a multi-million-pouds legal claim over its “excessive and unlawful” charges on apps and services purchased through its Google Play Store.

Google is facing £920million legal action in the UK

The class legal action, which is on behalf of around 19.5m eligible Play Store customers in the UK, means Google faces potential damages of up to £920m – the equivalent of around £50 for each claimant.

It accuses Google of exacting a 30 per cent surcharge on all digital purchases made through the Play Store, the marketplace for apps and services for smartphones and tablets using the company’s Android operating system.

The 30 per cent fee generates “massive and rising levels of profit” for Google, the suit alleges, equating to an “unlawful and unearned tax imposed on ordinary people without justification”.

Liz Coll, a consumer rights consultant, filed the case in the Competition Appeal Tribunal (CAT) in London on Wednesday with the backing of legal firm Hausfeld & Co.

Hausfeld & Co is also leading litigation against Apple over the 30 per cent it also charges on all paid app revenue and in-app purchases via its App Store.

Ms Coll told i: “This case isn’t about looking at tech companies and criticising them for being big; it’s about asking if they’re being responsible and treating people fairly.

“We think Google is treating consumers very unfairly and overcharging them because they don’t really have any other options – it’s hitting people in the pocket.”

While it is possible to “sideload” – download apps as Android Package Kit files (APK) from outside the Play Store – on Android devices, Ms Coll said the majority of users were unlikely to be technically-minded enough to know how to do it.

“It’s a simple question of unfairness and people are so reliant on these digital companies that I don’t think they always realise how choices have been closed off to them,” she added.

“Google has given people access to mobiles and all sorts of digital services, but it’s still really important that people are treated fairly and are able to access alternatives that may well be cheaper.”

The case covers the approximately 19.5m people in the UK who have bought an app, digital content, services or subscriptions within a non-Google app since 1 October 2015.

Those who do not want to be part of the claim will be able to opt out through the App Store Claims website.

People who have made more expensive purchases would technically be entitled to a larger portion of the damages if the action proves successful.

The case is similar to separate legal action filed by 37 US state and district attorneys general earlier this month, which accused Google of “buying off competitors and using restrictive contracts to unlawfully maintain a monopoly for its app store on Android phones.”

Google said the case “ignores the benefits and choice Android and Google Play provide as well as the competitive market in which we operate,” pointing out 97 per cent of Play Store developers do not pay a service fee.

“Android gives people more choice than any other mobile platform in deciding which apps and app stores they use – in fact most Android phones come preloaded with more than one app store,” a spokesperson for the company said.

“We compete vigorously and fairly for developers and consumers – 97 per cent of developers on Google Play don’t pay any service fee at all, which means their apps are free to consumers. Less than 0.1 per cent of developers are subject to a 30 per cent service fee and only when they’re earning over $1m – that fee is comparable with our competitors and allows us to constantly reinvest in building a secure, thriving platform that benefits everyone who uses it.”

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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