Google's Play Store Commissions Are Under Increasing Scrutiny Around The World

Alphabet Inc.'s GOOGL Google is coming under increasing scrutiny by regulators around the world for its Play Store commissions. While Epic Games set the ball rolling with its lawsuit in 2020, regulators in Australia, India, and South Korea, among others, are tightening the screws.

What Happened: Regulators in multiple countries around the globe are turning up the heat on Google's Play Store commissions, billing systems, and anti-competitive practices.

For instance, Google alone has been fined $10.63 billion since 2017 by regulators and courts around the world.

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Spurred by the Epic Games' lawsuit when Google and Apple Inc. AAPL booted Fortnite out of their respective app stores in 2020, regulators around the world have begun scrutinizing the practices of these two companies much more closely.

Turning Up The Heat: For instance, the Australian Competition and Consumer Commission (ACCC) is considering a law to let app developers offer in-app purchases without cutting their earnings to Google and Apple, reported The Guardian.

"If our country doesn't take the step to empower this so that this obligation is there, it won't be offered," ACCC chair Gina Cass-Gottlieb said.

Currently, Google and Apple take up to 30% of app developers' sales from their app stores. Google reduced it to 15% for the $1 million, after which it will charge a higher rate of 30%, but developers will have to enroll in this program specifically.

In India, Google has been directed by a local court not to remove the Disney+ Hotstar app from the Play Store, reported Reuters. The court also directed Google to charge a significantly lower commission of 4% on in-app purchases in the app, instead of the 11-26% that it charges otherwise.

South Korean regulators imposed a $32 million fine on Google for its anti-competitive practices of squeezing out a local rival. The regulators also forced Google to offer alternative payment systems instead of its own, giving app developers the freedom to choose the system.

On the other hand, the Netherlands has had little success so far – it has only been able to get Apple to offer alternate payment systems only for dating apps.

Despite this, regulatory scrutiny is increasing, and the European Union's Digital Markets Act will likely force Google and Apple to offer alternate payment options.

It remains to be seen if the two companies dominating the smartphone industry with the Google Play Store and App Store will fall in line or drag out the process.

Image Credits – Shutterstock

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