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In a firm ‘swipe left’, Match Group has slammed Google with a lawsuit for its alleged chokehold over profits from in-app purchases.
Match Group, the company behind popular dating apps Tinder, Hinge and OkCupid, is suing Google for anti-competitive behaviour in its app store.
In a lawsuit filed in a California district court yesterday (9 May), the Dallas-headquartered online dating company accused Google of using its monopoly power over the Android ecosystem to restrict the ability of app developers to use alternative in-app payment services.
“10 years ago, Match Group was Google’s partner. We are now its hostage. Google lured app developers to its platform with assurances that we could offer users a choice over how to pay for the services they want,” the lawsuit reads.
“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.”
‘Extortionate’ commission
Both Google and Apple charge up to 30pc commission from apps hosted in their stores that sell in-app goods and services. Developers and regulators alike have raised concerns that the two companies have too much power in the mobile apps market.
The UK Competition and Markets Authority said in December that Google and Apple hold too much control in a way that can “limit innovation and choice”. Competition complaints have also been made by Spotify and Epic Games over Apple’s control in the App Store.
While Google requires in-app payments to be carried out through its billing service, where the company takes a cut, it announced earlier this year that it is testing a way for Android developers to offer their own payment systems, starting with Spotify. However, it has not been confirmed what kind of commission Google still might make with this arrangement.
In its complaint against Google, Match Group accused the company of “bait and switch tactics” that exploit the app developers “it so ardently courted and claimed to support”.
“Google has grown Google Play into the only viable Android app marketplace,” it added. “If a developer wants users to find its app, that app must be on Google Play.”
Match also hit out at the “extortionate tax” of up to 30pc that Google takes as commission from the proceeds of in-app payments.
What does Google say?
Google responded by saying that Match Group’s apps were eligible to pay the 15pc reduced commission on in-app purchases of digital subscriptions, a rate that Google spokesperson Peter Schottenfels said is that “the lowest rate among major app platforms”, according to the New York Times.
“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,” Schottenfels added.
In response to the lawsuit, Google published a lengthy statement with the intention of “setting the record straight” on Match Group’s “cynical campaign” against the Google Play store.
“Because Match Group doesn’t believe it should have to pay anything for the substantial services we provide, it’s willing to compromise user safety as part of a global campaign to smear our business and how we operate,” the statement reads.
“We’re always looking to work in good faith with partners to grow and evolve the ecosystem, but we’ll stand firm against false attacks on our business, especially when it puts users at risk and endangers our ability to continue investing in and serving our developer community.”
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