Google and Match announced today they’ve reached a settlement in the antitrust battle Match waged against the tech giant, even as the court case continues with Fortnite maker Epic Games. As part of the settlement agreement, Match Group — which owns dating apps Tinder, Hinge, OKCupid, Match.com and others — will be able to implement “user choice billing” by March 31, 2024. This feature allows users to pay with other systems besides Google’s own.
Spotify and Bumble were among the initial testers for the new system, first introduced in November 2022. Since then, Spotify’s third-party billing option rolled out to worldwide markets as Google expanded user choice billing to more countries outside the U.S.
The program, so far, has not allowed third-party app markers that charge users for purchases and subscriptions to do away entirely with the commission Google requires. Instead, it offers a small percentage off the standard 15% to 30% commission. Currently, that discount is 4%, per Google’s help documentation. The program is also still a pilot open to all developers globally who are selling apps to users in the supported 35 markets where it’s now available. Google has not said when the program will become globally available.
As part of the agreement, Match Group will not be allowed to only offer its own billing system — it will offer its system alongside the existing Google Play billing system. Users will be able to choose which way they want to pay.
In addition, the settlement agreement includes a provision that Google will continue to work with Match Group in other areas where the two companies partner, including in Google Cloud and in the use of Google’s AI technologies, a Google spokesperson said. This suggests that the rift between the two tech companies incurred by the lawsuit could have led to more complicated relationships across other areas of both Google and Match’s business.
Like Apple, Google has long stressed that its commission structure is not only based on its ability to process payments for its customers. Instead, it suggests that the fees help to support the entire Google Play and Android app ecosystem, including hosting, app discovery, developer tools and other resources necessary to create an app business.
But as larger companies like Match and Epic have argued, they don’t need the same resources as other developers. In fact, as Epic demonstrated, they could self-distribute apps and manage their own payments. They believed they should then at least have the option to have a more direct relationship with their paying customers, and Google preventing this was an anti-competitive concern.
“We are pleased to reach a settlement agreement with Match Group,” a Google spokesperson said, in a prepared statement. “This ensures we can continue to provide our shared users the secure, seamless, and high-quality experience people expect from apps on Google Play while maintaining Google’s ability to invest in the Android ecosystem and deliver value across an app’s full lifecycle,” they added.
“Today, the Match plaintiffs and Google informed the court that they have reached a binding term sheet for a settlement of their respective claims against each other in the Match Group, LLC et al vs. Google LLC et al lawsuit. Under the terms, the $40 million placed in escrow will be returned to Match Group and no other amounts will be owed by the Match plaintiffs to Google relating to the claims in the lawsuit for the period ending December 31, 2023,” a Match Group statement added, shared alongside the release of its Q3 earnings results.
Recently, Google had pushed Match Group for more money in escrow, saying that the $40 million would not be enough to cover the missed payments. (Match had been allowed to escrow funds to cover commissions while the lawsuit was underway.)
Match noted that the parties agreed that by March 31, 2024, its apps will implement Google’s User Choice Billing, reducing its commission payments from 15% and 30% to 11% and 26%, respectively.
“The parties will enter a new partnership agreement that will provide value exchange across their broad relationship, which we expect will essentially offset the additional costs that Match Group brands expect to incur over the three years starting in 2024 associated with the implementation and continued use of User Choice Billing in compliance with Google’s payment policy during that period,” Match Group also said.
In addition to the settlement news, Match Group reported a 9% year-over-year increase in revenue in Q3 to $882 million, with Tinder’s portion up 11% to $509 million.
It’s unclear whether this settlement will prompt Epic Games to also reach an agreement with the tech giant. If it does not, it’s set to go to trial next week to present its arguments.
Source @TechCrunch
