Court OKs billion-dollar Play Store gouging suit against Google
Just as web giant accepts third-party payment platforms, reduces fees in the EU
A London court on Tuesday authorized a lawsuit that seeks to have Google pay £920 million ($1.1 billion) for overcharging customers for app store purchases.
Filed as a class action on behalf of 19.5 million UK citizens, the suit alleges Google charged commission fees up to 30 percent on app sales. Consumer rights advocate Liz Coll, who previously served as digital policy manager at consumer rights organization Citizens Advice, brought the lawsuit, alleging Google has violated both EU and UK competition laws.
Representatives for the claimant group told Reuters that a detailed judgment has yet to be published, but the initial filing made in July 2021 specifies that Google violated multiple sections of the Competition Act 1998.
For incidents happening before the UK left the EU, the suit also alleged violations of Article 102 of the Treaty on the Functioning of the EU, which covers abuse of dominant market positions.
Google has not responded to a request for comment.
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Meanwhile, in the EU …
Perhaps coincidentally – or not – Google yesterday announced that it would begin to let app developers in the European Economic Area use alternative billing systems, and that purchases made through said alternatives would have developer fees reduced by three percent.
"Since 99 percent of developers currently qualify for a service fee of 15 percent or less, those developers would pay a service fee of 12 percent or lower," said Estelle Werth, Google's director for EU government affairs and public policy.
Games are not included in the billing scheme changes, though Google said they may be added in the future.
Google's announcement comes less than two weeks after the EU passed the Digital Markets Act and the Digital Services Act (DMA and DSA) – a pair of sweeping laws that limit what companies can do digitally within the EU's boundaries. The DMA includes a provision that would require tech companies to allow third-party payment systems or risk fines as high as ten percent of their global turnover.
EU tech laws don't apply in the UK, right?
While the laws don't apply in the UK, equivalent laws mean the UK's data privacy and digital markets operate under similar regulations.
The EU has considered the UK to have "adequacy" with the GDPR since June 2021, meaning the UK's data protection laws are roughly equivalent to the EU's. According to the Information Commissioner's Office, the GDPR has been incorporated directly into UK law, meaning "there is little change to the core data protection principles, rights and obligations."
The Commissioner said companies operating in the UK are also covered by the UK's own Data Protection Act, passed in 2018. The UK is working on laws that resemble the DMA, and could therefore affect Google in a manner similar to the EU legislation.
The UK launched its Digital Markets Unit (DMU) – a subsidiary of the Competition and Markets Authority (CMA) – in 2021 to enforce laws akin to the DMA.
In a May 2022 LinkedIn post the CMA said it is watching the DMA closely because "there are many links between the EU's regime and the UK's approach."
The DMU is still without much power, as UK laws governing digital markets "won't be introduced in the next parliamentary session (2022 to 23)," the CMA said. The UK government recently reiterated what it said over a year ago when the DMU was established: Legislation giving the unit regulatory power would be passed "as soon as Parliamentary time allows." ®
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