Google Rejected Play Store Fee Changes Due to Impact on Revenue, Epic Lawsuit Shows

tech.hindustantimes.com:

Alphabet Inc.'s Google considered changing its app store pricing model to circumvent a regulatory crackdown, but abandoned a proposal to charge a set fee per app after it became clear that could cost the company billions of dollars, according to documents released late Thursday.

Google created Project Everest in 2021 to reconsider the Play Store billing model, according to the documents, which were released as part of an antitrust suit by Epic Games Inc. Google last week lost the suit brought by the maker of Fortnite when a federal jury found the tech giant abused its monopoly power over the app store.

Sparked by mounting pressure from regulators and developers over Google Play's hefty 30% commission, the presentation showed the search giant was concerned about staving off what it saw as potential regulatory overreach. 

“We can defend the status quo for a few months,” Google said in the presentation. “Making proposed changes sooner may help support reasonable legislation, position Google as a leader, and prevent more draconian legislation.”

Project Everest explored charging developers piecemeal service fees for putting their apps or games in the Play Store, with additional fees for user downloads, updates and referrals. But the company estimated that model created “potential for significant loss” from $1 billion to $2 billion for apps and $6 billion to $9 billion for games.

Instead, employees recommended allowing app developers to process payments themselves in exchange for paying Google a lower fee. The company estimated the change would reduce the store's annual revenue between $250 million and $1.3 billion, depending on how many users opted for the other payment choice. That solution essentially mirrors the $700 million