18 December 2023
Google will allow developers to offer direct payment options on its US Play Store after settling an antitrust case brought by 50 US State Attorneys General.
The New York Times reports that Google will pay $700 million, including $630 million for a consumer fund, and will highlight payment choices for users of its US Play Store in future.
The suit alleged that Google abused its dominant market position by imposing levies and forcing aggressive terms on app developers. The case was originally brought in July 2021 and settled in September, although details were only released by Google yesterday.
Google lost a similar case brought by gaming company Epic last week, following a jury trial in San Francisco. Epic alleged that the Play Store's levies and aggressive terms harmed Epic’s business. Google plans to appeal the Epic verdict, but settled a similar case with dating app Match in October.
The Play Store charges app makers a 15% fee for user subscription payments and up to 30% for in-app purchases.
Other jurisdictions are also scrutinising app store market dominance:
🔹 South Korea amended its Telecommunication Business Act in 2021 to prevent Google and Apple from forcing software developers to use their respective payment systems. Rules under the Act were passed in March this year. Google has since offered alternative billing options in South Korea.
🔹 Google's Play Store and Apple's App Store were designated as “very large online platforms” under the EU’s Digital Services Act in April. The EU Commission sent Google and Apple formal requests for information on how their respective app stores comply with DSA requirements for online marketplaces last week.
Regulatory scrutiny of dominant online platforms is increasing, with jurisdictions taking different approaches to curbing their market power. Again we see the US relying on existing ex-post antitrust laws, with the EU and other jurisdictions imposing up-front, ex ante requirements to tackle specific problems.