37 US state attorneys general have initiated a lawsuit against Alphabet Inc (GOOGL) claiming that it had bought limiting contracts from its competitors and used them to retain the monopoly of its own online store for Android-powered devices.
The accusations towards Google Play Store erupted as the result of an investigation that began in September, 2019, and was carried out with participation of almost all States. These factors can potentially lead to significant changes to the ways in which the company has been generating its billions of profits, including advertising, in-app purchases and smart home gadgets.
The attorneys general of the states of Utah, New York, North Carolina, and Tennessee claim that Google has earned “enormous profit margins” from its Play Store by using an unlawful strategy and maintaining its monopoly in selling apps for Android and products inside them.
According to the lawsuit, Google Play accounts for 90% of all applications downloaded for Android.
It is also claimed that “Google leverages its monopoly power with Android to unlawfully maintain its monopoly in the Android app distribution market”.
It is very likely that the pressure like this will seriously limit Google’s growth prospects and create conditions for a future series of share price corrections.