Noticias

The National Economic Prosecutor’s Office (FNE) has filed a lawsuit before the Antitrust Court (Tribunal de Defensa de la Libre Competencia, TDLC) against Google, alleging abuse of a dominant position by imposing restrictions on competition within the Android operating system. According to the FNE, these restrictions have affected the market for app distribution and the market for the distribution of paid digital goods within apps, at least since 2019.

In its filing, the FNE requested that the Court order Google to adopt a set of remedies to ensure the cessation of the anticompetitive conduct and to impose a fine of 101,482 Annual Tax Units (UTA), equivalent to approximately US$89 million.

The FNE launched its investigation in October 2022 after an individual alleged potential violations of competition law related to the distribution of applications through the app stores of both Apple’s iOS and Google’s Android operating systems, which later led to separate investigations.

After completing its investigation, the FNE concluded that Google holds substantial market power in Chile regarding the Android ecosystem, with a 95% market share in app distribution and over 99% in the distribution of paid digital goods within apps downloaded via Google Play. These market shares, combined with high barriers to entry—such as network effects, sunk innovation costs, and the very restrictions imposed by Google—support a finding of dominance at the national level.

Anticompetitive Conduct

In the app distribution market within the Android ecosystem, the FNE found that Google has implemented restrictions that limit download channels other than its Google Play Store. These include: requiring mobile device manufacturers to preinstall the Play Store in a prominent location as a condition for distributing Google apps; blocking the distribution of alternative app stores through Google Play; and introducing unnecessary frictions that hinder the download of apps or app stores via the web.

These practices have made developers and consumers increasingly dependent on Google Play as the exclusive distribution channel within the Android ecosystem.

In the market for the distribution of paid digital goods within apps—such as subscriptions to streaming services, music, e-books, or in-app purchases—the FNE found that Google required developers to exclusively use its integrated billing system, Google Play’s Billing System. Developers were also prohibited from informing users about, or redirecting them to, alternative payment methods or promotions outside the app.

Felipe Cerda, Acting National Economic Prosecutor, stated that detecting and prosecuting abuses of dominance is a priority for the FNE, emphasizing that dominant firms are subject to a special responsibility not to distort competition.

“These anticompetitive practices have enabled Google to consolidate Google Play as the primary app distribution channel and have curtailed developers’ and consumers’ options for distributing and accessing digital goods within apps. The FNE maintains close scrutiny of such conduct, which is condemnable in both traditional and digital markets,” Cerda affirmed.

Requested Remedies

In addition to the fine, the FNE requested that the Court order Google to implement the following measures:

1. Refrain from conditioning access to Google products, services, payments, or revenue-sharing on agreements requiring the preinstallation of Google Play in a specific location on the device interface;
2. Permit the distribution of third-party app stores through Google Play;
3. Eliminate all unjustified or disproportionate actions, messages, or mechanisms that discourage—or are likely to discourage—the downloading of apps or app stores through channels other than Google Play;
4. Allow developers to enable the use of alternative in-app billing systems, without prejudice to maintaining Google’s integrated billing system where required;
5. Permit developers to redirect users to external billing systems from within the app, including through buttons, links, or equivalent interface elements;
6. Allow developers to inform users—both inside and outside the app—about alternative billing systems, prices, promotions, and any product-related information;
7. Cease all conduct described in the lawsuit that prevents, restricts, or hinders competition, or aims to do so;
8. Comply in good faith with these remedies, meaning that no technical or contractual measures may be imposed that would undermine their purpose.

See Full Complaint