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Tinder parent firm Match Group sues Google for 'illegal' monopoly

Tinder parent firm Match Group sues Google for 'illegal' monopoly

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Match Group, the parent company of Tinder, Match, and OkCupid, is suing Google for allegedly restricting its billing policies on the Google Play Store. In a complaint seen by MARKETING-INTERACTIVE, Match Group alleged that Google "illegally monopolised the market" for distributing apps on Android devices with its Play Store.

The complaint added that Google "lured app developers to its platform" with assurances that the latter 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," Match Group said. The complaint also accused Google of using bait and switch tactics to exploit app developers.

Two years ago, Google required all apps that sell "digital goods and services" to use Google Play Billing exclusively beginning September 2021. According to Match Group, no alternatives to Google Play Billing were allowed and the consequence of non-compliance was "banishment from Google Play".

At the same time, when transactions involve the purchase of digital goods or services using Google Play Billing, the complaint alleged that Google would keep as much as 30% for itself. While Google labelled this a "fee", Match Group called it an "extortionate tax" in the complaint, adding that it was nearly 10 times the actual fees other payment processors charge in competitive marketplaces. Match Group also pointed out that the phrase "digital good or service" is "ill-defined and arbitrarily applied" as clothing and food delivery as well as ride-sharing apps do not qualify under this term.

"Google’s policy change eliminated the promised exception that had previously enticed Match Group and other popular apps — such as streaming services — to offer in-app purchases and spend time, effort, and money to develop their own in-app payment systems," the complaint said. According to Match Group, monopolising the Android in-app payment processing market allows Google to impose a 15% to 30% tax on the billions of dollars users spend on "digital goods and services" on Android.

Google defends allegations

Meanwhile, Google has defended itself, telling The New York Times that like any business, it charges for its services. The spokesperson explained that Match Group's apps were entitled to pay a 15% commission on in-app purchases, adding that the rate is "the lowest among major app platforms", NYT reported.

Google's spokesperson also said that the complaint is "a continuation of Match Group's self-interested campaign" to avoid paying for the significant value the company receives from the mobile platforms that it has built its business on, NYT said.

Meanwhile, Wilson White, Google's VP, government affairs and public policy, said in a blog post that Google Play’s billing is an important part of its business model, and it allows the company to provide consumers with critical safety protections from things such as payment fraud and subscription abuse.

"But Match Group would have you believe that all Google Play provides is payment processing. This simply isn’t true, and Match Group knows it," he said. White clarified several pointers in the blog post, including Google's fees covering a full range of services offered by Google Play, in addition to payment processing.

According to White, Google Play has built a consumer base of more than 2.5 billion 30-day active users in 190 countries globally. Its service fee helps sustain that app and game ecosystem.

White added that Google's fees are the lowest among major app stores. Google Play is the first major platform to move away from a one-size-fits-all pricing to meet the various needs of developers, White said. Currently, around 3% of developers are subject to a service fee and 99% of these developers qualify for a service fee of 15% or less.

According to White, 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. "Match Group claims that they’d suffer if they complied with our policies, but they already comply with the policies of other app stores that charge much more than Google Play," White said.

He added that Android is the only mobile platform that offers Match Group alternative distribution choices. More than half of Android devices come preinstalled with two or more app stores. "Android is a uniquely open operating system and provides Match Group with multiple ways of distributing their apps to users outside of Google Play, including through other Android app stores, or directly to users via their website. And Match Group can of course distribute through Google Play as consumption-only apps," he explained.

At the same time, White also pointed out that regulators are investigating Match Group's safety problems. He stated that Match Group wants to continue imposing its own billing system, one that "has repeatedly faced regulatory scrutiny for things such as subscription fraud".

On the other hand, Google Play's billing system is focused on protecting users from these same types of abusive practices by providing transparency and easy-to-use features to manage purchases and subscriptions. "Match Group may not like these protections, but consumers do," he said. MARKETING-INTERACTIVE has reached out to Match Group for comment.

This latest lawsuit comes two years after Epic Games sued Apple and Google for "anti-competitive actions". Epic Games accused Apple of monopolistic behaviour by demanding a 30% cut on in-app purchases from the iOS app store. Meanwhile, Epic Games also wanted to end Google's "unlawful monopolisation and anti-competitive restraints". A year later, Apple decided to make allow the likes of Spotify and Netflix to bypass Apple's payment system and keep their share of revenue. The announcement then, however, did not make mention of gaming apps.

Photo courtesy: 123RF

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