Are you interested in learning what’s next for the gambling industry? Join game managers to discuss emerging parts of the industry this October at GamesBeat Summit Next. Learn more.
Law firm Hausfield has called for the preliminary approval of a $ 90 million settlement on behalf of developers in a case against Google. The case is an antitrust litigation case and accuses Google of competing behavior and illegal practices. The allegations focus specifically on the Google Play Store, where Google requires developers to pay Google a 30% tax on revenue from paid apps and in-app purchases.
The $ 90 million settlement is on behalf of app developers with less than $ 2 million in annual sales. As it happens, it’s most of them.
“This settlement is a fitting end to a complex and difficult issue, and will have a huge impact on the way application developers do business on Google Play for years to come,” Hausfeld’s Melinda R. Coolidge said in a statement. told GamesBeat. .
In addition to paying out $ 90 million to developers, Google confirmed that the litigation was the reason for the 2021 launch of a program that made developers pay a 15% reduced service fee on their first $ 1 million in annual revenue. Google also maintains the reduced fee for at least three years.
The app store owner is also committing to a series of structural reforms, including the further development of an “Indie Apps Corner” on the Google Play Store homepage. Google will also be publishing an annual transparency report in the future.
Anti-competitive application shops everywhere are sued
This is not the first lawsuit that has focused on competitive behavior. In May 2022, Apple failed to dismiss a lawsuit from rival Cydia. The competitive app store pointed to a series of software updates between 2018 and 2021 that he said were “public” acts that harmed iOS developers, like himself.
The 30% tax is also somewhat of a bottleneck. In 2020, Fortnite developer Epic Games sued Apple over removing Fortnite from Apple’s app store. Fortnite used an in-app purchase method that bypassed Apple and its 30% tax, which led to Apple removing Fortnite from the platform.
That particular case did not go entirely in Epic’s favor.
The different lawsuits are not quite the same. All of them focus on slightly different things, and aim for different results. But the similarities are striking. Apple basically won a few years ago. This time, Google lost. In either case, that 30% tax was a key factor.
So now the question is whether this lawsuit against Google paves the way for a new lawsuit against Apple. Or Apple, which cuts commission fees from 30% to 15% for applications with less than $ 1 million in annual revenue, will protect it or not.
The CAF sees the Google settlement as an empty gesture
The Coalition for App Fairness is not very happy with the Google settlement. The group came together to fight for fairer practices for developers in the Play Store and the Apple App Store.
Originally a coalition of 13 companies, including Epic Games, the CAF has grown to more than 40 members since 2020. The CAF quickly points out that this arrangement does not actually change enough for developers in the Play Store.
“This agreement does nothing to open up the mobile application ecosystem to competition or to solve the underlying problem. “Even if approved, Google will retain control over how consumers acquire applications and make purchases within those applications, leading to high fees and less innovation,” said Rick VanMeter of The Coalition for App Fairness. “This settlement makes it clear that policy solutions such as the Open App Markets Act will help ensure a free and fair mobile application ecosystem.”
GamesBeat’s creed when the coverage of the game industry is “where passion and business meet.” What does it mean? We want to tell you how the news matters to you – not just as a decision maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts or watch our videos, GamesBeat will help you learn about the industry and enjoy getting involved. Learn more about membership.