A consumer tussle about Google Play Store charges began in the Competition Appeal Tribunal in London on Tuesday. The case may set the precedent for the future of commissions in the app store in the UK and it comes on the heels of a slew of lawsuits targeting big tech firms.
What the Google Play Store Lawsuit Alleges
The claim is worth more than £1 billion ($1.33 billion). It's being introduced on behalf of about 20 million consumers who downloaded apps from the Google Play Store or paid for in-app purchases and subscriptions since 2015.
Prosecutor Liz Coll is headlining the case. Her lawyers claim that Google took advantage of its market dominance by imposing a disproportionate fee for app purchases, in-app purchases and subscriptions, up to 30% of these.
How Play Store Commissions Reach Consumers
The central argument is who pays in the end. According to Coll's legal team, the app developers passed the cost of Google's commission on to consumers by charging them more for the apps. As an example, they cite YouTube Premium, a copyrighted service that Google has sold via Apple's iTunes Store that it opted not to receive a commission.
The claim, if the tribunal is right, would reveal the impact that app store fees can have on the cost of digital subscriptions and in-app purchases for the typical consumer.
Google's Defence: Competition and Consumer Choice
Google's parent, Alphabet, is challenging the case. A spokesman said this is a misunderstanding of the amount of choice Android offers to users, and that Google has "some of the lowest fees in the market.
Google's lawyers complained the case is baseless. They stated that the Play Store is highly constrained on both sides, consumer and developer, in terms of competition from other platforms, specifically Apple's App Store. It is likely that one of the major issues for the tribunal will be whether those alternatives are real or not.
A Wider Pattern of Big Tech Litigation in Britain
This is the most recent of the lawsuits brought by the United Kingdom against big tech firms. The trial is reminiscent of the one brought by users against Apple for its App Store, and Sony for its PlayStation Store, both of which had paid commission fees up to 30%.
The lawsuit also occurs in the wake of years of regulatory attention and litigation on Google's app store practices. One of the ongoing cases was Epic Games, the developer of Fortnite, which is set to be heard alongside Coll's case in London.
Recent Settlements Over Google Play Store Fees
Google has already settled some similar disputes. Google and Epic Games struck a global deal in March, with Google promising to offer more billing methods and to lower developer fees.
Google also settled a similar case, representing app developers, for £260m last month. There was no admission of liability or wrongdoing in the settlement.
What the Outcome Could Mean for App Developers and Users
The ruling of the tribunal will have a wider impact than this one. If the claimants are successful, it may provide momentum for future cases challenging platform commissions, and may affect how digital platforms charge fees. A decision in favor of Google would uphold the notion that competition “keeps fees in check” among app stores.
The outcome will have ramifications for the millions of consumers who are under the coverage of the claim, whether some form of compensation is due to them for past purchases. It could impact developers' pricing strategies over the coming years.
The proceedings are in their infancy, and both sides will provide extensive evidence regarding competition, pricing and consumer choice in the market. The ruling of the tribunal will be closely followed by regulators, developers and technology businesses in the UK and around the world.
