In its latest court filing in its antitrust dispute with Epic Games and Match Group, Google asserts that the maker of the dating app owes additional costs over the $40 million that was previously placed in escrow. These funds represent Google’s share of Match’s in-app payments on Google Play, which Match claims are “illegal under federal and state law.” The outcome of the legal dispute will determine this. According to Google’s calculations, the increased sum should really equal roughly $84 million based on Match’s disclosed earnings.
The filing’s pertinent passage is as follows:
Match filed a TRO in this matter, which Google and Match agreed to resolve in May 2022. No. 3:22-cv-02746-JD in Dkt. 21. Despite not adhering to Google’s payment regulations, that requirement permitted Match to continue offering its apps through the Play Store as long as it, among other things, paid $40 million in escrow payments. Even though those payments have already stopped, Match still pays Google much more in service fees. See Match Group Letter to Shareholders, Q1 2022, at 9, 10 (noting negative financial impact from Google’s insistence that users utilize its payment system); s22.q4cdn.com/279430125/files/doc_financials/2022/q1/Earnings-Letter-Q1-2022-vF.pdf. To recoup the entire amount due to it, Google plans to pursue its counterclaims.
The escrow account was just one of a number of concessions Google made in order to convince Match to dismiss a temporary restraining order it had first sought against the internet giant, accusing it of exercising unfair monopoly power in its Google Play Store for mobile apps. Additionally, Google promised not to ban or remove Match-owned dating apps like Tinder, Hinge, OkCupid, and others from the Play Store just because they accept other payment methods.
As a condition of this agreement, Match agreed to deposit up to $40 million in the escrow account instead of paying Google directly for in-app payments that happen outside of Google Play’s own payment system, while the legality of the commissions Google charges app developers on in-app purchases is being debated in the courts.
However, Google claims in the most recent filing that $40 million is insufficient, using Match’s disclosed earnings. In its shareholder letter for Q2 2022, the maker of dating apps states that “While our Q2 Adjusted Operating Income outlook includes an estimated $6 million of negative impact from Google’s policy change beginning June 1st, we need to see the actual effects once the change is implemented.”
Match owes Google fees of $6 million, according to Google, but the lawsuit stopped the payments. Based on this sum, Google calculates that Match owes fees totaling $84 million, or $6 million each month, for the last 14 months. That is more than the $40 million that is now being kept in escrow; therefore, Google is now preparing to attempt to recoup a larger sum in its counterclaims.
The lawsuit states, “While those payments have now been completed, the service fees that Match owes Google substantially exceed that amount.” Google plans to pursue its counterclaims in order to recoup the full amount owed to it.
