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Wednesday, May 25, 2022

Match sues Google over app store billing rules

Match Group, which operates dating apps such as Tinder and OkCupid, alleged that Google breaks federal and state laws and abuses its power.

By: Bloomberg |
May 10, 2022 12:43:13 pm
Match Group, which operates dating apps such as Tinder and OkCupid, alleged that Google breaks federal and state laws. (File Image)

Match Group Inc. accused Alphabet Inc.’s Google in a lawsuit of acting as a monopolist with its app store billing rules, the latest escalation in a brawl over the mobile-app industry. Match Group, which operates dating apps such as Tinder and OkCupid, alleged that Google breaks federal and state laws and abuses its power with a requirement that app developers use its billing system on Android devices.

“Ten years ago, Match Group was Google’s partner. We are now its hostage,” Match Group said in a complaint filed Monday in northern California federal court. “Blinded by the possibility of getting an ever-greater cut of the billions of dollars users spend each year on Android apps, Google set out to monopolize the market for how users pay for their Android apps.”

Google, like Apple Inc., has faced enormous recent legal and political scrutiny over the commission fees and billing restrictions both companies apply to paid services in their app stores. Congress is currently weighing a bill to force Google and Apple to change their business models.

In response to public pressure, Google has halved its 30% fee for some apps. But the company said it would tighten its rules that require the use of its billing system for in-app purchases, citing security concerns. Google gave a June 1 deadline to comply or be removed from its Play Store.

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In March, Google announced it was letting select apps offer their own billing service in addition to Google’s on Android devices. Spotify Technology SA, another app store critic, said it was using this option and Google suggested more companies would follow.

Not Match Group, apparently. “This lawsuit is a measure of last resort,” Chief Executive Officer Shar Dubey wrote in a statement. The executive said her company tried “in good faith” to resolve its concerns with Google but was left with “no choice but to take legal action.”

In the filing, Match Group said that it asked Google to adopt this new “user billing” feature but Google refused.

A Google spokesperson said in a statement that Match would still be able to reach consumers through other app stores available on Android devices or the web. “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,” the spokesperson said. “Like any business, we charge for our services, and like any responsible platform, we protect users against fraud and abuse in apps.”

Match is forecasting $42 million in additional costs for Google’s Play Store during 2022, chief financial officer Gary Swidler told analysts last week. That’s on top of the $100 million in payments to Google the company expects to make. Swidler said that Match customers use the company’s in-app billing system three times as often as they use Google’s own service.

Epic Games Inc., the maker of Fortnite, has previously sued both Apple and Google over similar allegations.

A federal judge ruled last year in Epic’s case that Apple had to let developers direct users to web payments services outside of its app store, but stopped short of calling Apple a monopolist.

Match Group, which was spun off from IAC/InterActiveCorp. in 2020, is a massive Google advertiser and has become a frequent critic of its business practices. The company posted its lawsuit publicly under the website, EndtheGoogleTax.com.

The case is Match Group LLC v. Google LLC, 22-cv-02746, U.S. District Court, Northern District of California.

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