Match Group, the parent company of dating apps Tinder and OkCupid, sued Google on Monday, claiming that the charging practices for its smartphone play store are outrageous, causing a breach of the agreed antitrust laws.
According to The Verge, Match Group says Google is “illegally monopolising the market for distributing apps” on Android and mandating the development team to use Google’s billing system and afterwards collecting a cut of their revenue.
In 2020, a similar accusation ensued. Epic Games, the developer of Fortnite, filed a lawsuit against Apple, claiming that the software company participated in “anti-competitive” activity by demanding a 30 per cent on in-app purchases in the iOS app store, among many other claims. At the end of the case, the judge, Yvonne Gonzalez Rodgers, ruled against Fortnite.
Where it all began
In 2020, Google released a statement requiring specific in-app forms, including apps that purchase digital items, to utilise its billing system. This billing policy is only required for developers that charge customers to download or sell in-app digital items. With a charge rate of 3%, Google can earn up to a 30% profit.
In March 2021, Google however slashed the charge fee to 15%, only for developers who have earned their first $1 million. In October of the same year, music streaming applications and subscriptions were required to adopt the Google billing policy.
Following this, Match Group has sued Google for using “bait and switch methods” to deceive developers about its payment procedures.
“Ten years ago, Match Group was Google’s partner. We are now its hostage,” Match Group said in a press release.
The Match Group complaint, according to The Verge:
Google lured app developers to its platform with assurances that we could offer users a choice over how to pay for the services they want. But once it monopolised the market for Android app distribution with Google Play by riding the coattails of the most popular app developers, Google sought to ban alternative in-app payment processing services so it could take a cut of nearly every in-app transaction on Android.The Match Group Complaint
Another claim Match Group made against Google is that they intend to impose an “app store tax”, which will be acquired from users. Match Group says Google is looking to benefit from this new billing policy. This will give Google access to customers’ credit card information and identities, which it can use.
In a post on its public policy blog, Google responded to Match Group’s complaint, saying that Match Group is “attempting to freeload off our investments rather than being a responsible partner”.
The policy blog explained the reasons behind their actions, including trying to stop fraudulent activities.
Also, on the blog, Google stated that “just around 3% of developers are subject to a service fee and 99% of those developers qualify for a service fee of 15% or less. Match Group’s apps, for example, are eligible to pay just 15% on Google Play for digital subscriptions, which is the lowest rate among major app platforms.”
A statement was issued by a Google spokesperson, Dan Jackson to The Verge about the complaint:
This is just a continuation of Match Group’s self-interested campaign to avoid paying for the significant value they receive from the mobile platforms they’ve built their business on. Like any business, we charge for our services, and like any responsible platform, we protect users against fraud and abuse in apps. Match Group is currently attracting regulator concerns over things like deceptive subscription practices, and with this filing they continue to put money ahead of user protection.Dan Jackson, Google spokesperson to The Verge
Google also pointed out that Match Group was sued by the Federal Trade Commission in 2019 for failing to filter out fake profiles that may have incentivised users into paying for subscriptions. The lawsuit was thrown out earlier this year.
Match says it attempted to resolve Google’s concerns but was told that its apps would be removed from the Google Play Store by June 1 if it didn’t comply.
The dating app maker’s lawsuit accuses Google of violating the Sherman Antitrust Act, the California Cartwright Act, the California Unfair Competition Law and California tort law by demanding companies exclusively use Play Billing.
“They control app distribution on Android devices, and pretend that developers could successfully reach consumers on Android elsewhere,” Match Group CEO Shar Dubey said in a statement.
“It’s like saying, ‘you don’t have to take the elevator to get to the 60th floor of a building; you can always scale the outside wall.'”
If Match Group is forced to stop using its internal payment system, the company says it will suffer “irreparable damage to its customer relationships, reputation, business performance, and goodwill and its users will be harmed by increased prices and Google’s monetisation of their data.”
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