Why Google’s Decision to Retain Google Play Store Tax in 2021 Could Impact Your App’s Revenue

Two weeks ago, the Google Play Store was found guilty of violating antitrust laws after a lawsuit with game developer Epic. The jury ruled that Google’s in-app payment processing platform and the process of distributing Android apps were both monopolies. Epic sued Google after its popular game Fortnite was removed from the Play Store for violating in-app payment rules.

In 2021, Google considered changing the Play Store’s billing model, but the company was concerned about the impact on its revenue. Google calculated that proposed changes could result in a decline of $1 billion to $2 billion in annual revenue from apps and $6 billion to $9 billion from games.

The tech giant also floated the idea of having app developers handle in-app payment processing in exchange for paying Google a lower fee, but this option could reduce annual Play Store revenue between $250 million and $1.3 billion.

In September, Google reached a $700 million settlement with all 50 states, the District of Columbia, and two US territories. After giving the states $70 million of the settlement, the remaining $630 million will be shared among Play Store customers, who will receive a minimum of $2 each.

The lawsuit and settlement have put Google in a difficult position, as the company had to balance regulatory concerns with potential revenue losses. The decision to reject changes to the billing model outlines Google’s commitment to maintaining its revenue stream, even at the cost of potential legal implications.

This ruling and settlement could have a significant impact on the app market and the relationship between app developers and platforms like the Google Play Store. As the tech industry continues to face increased scrutiny over antitrust issues, this case serves as a reminder of the complex challenges faced by major tech companies.