YouTube pricing comes back to bite Google in UK app store trial

Consumers say YouTube’s higher prices on Apple devices undercut Google’s defense of its Play Store fees. Google argues its commissions pay for services that go well beyond checkout.(CN) — Google says Apple’s fees make YouTube subscriptions more expensive. Consumers suing Google say its own app store fees drive up their bills, too.At Britain’s Competition Appeal Tribunal, consumer advocate Elizabeth Coll is leading a collective claim for users she says paid inflated prices because Google restricted competition and charged excessive Play Store commissions. Google asks the tribunal to reject the claims, arguing that developers and customers have alternatives and that its services justify its fees.Downloading an app is often free. Buying a subscription or digital items inside it is where money changes hands — and Google takes a cut. Coll argues that commissions reaching 30% pushed developers to charge customers more. Her claim covers qualifying app purchases, in-app purchases and subscriptions through the U.K. Play Store from October 2015 through this July.She challenges how Google kept those transactions flowing through Play: requirements placing the store alongside other Google apps on phones, restrictions on competing stores and payment services and warnings when users download apps elsewhere. Google argues that Android offers multiple routes to customers and defends the warnings as security safeguards.Coll filed her claim in July 2021 and won permission to represent consumers collectively in 2022. The tribunal, sitting in London, is a specialist court that handles competition disputes and compensation claims. A 2015 reform made it easier to combine small individual losses into one lawsuit; eligible U.K.-based customers are included unless they opt out. Oral trial proceedings began Tuesday.On Wednesday, Coll turned to what happens when Google itself has to pay another app store’s fees. Her lawyers pointed to Google’s explanation that YouTube charged more on Apple’s operating system partly because of Apple’s commissions. Coll argues that Google recognizes the link between fees and customer prices in its own business while disputing it here.She cites Spotify, Roblox and Epic Games as further examples of developers passing commissions on to customers, challenging Google’s treatment of them as exceptions. Google counters that many major developers sell outside Play without offering lower prices, even when they avoid its fees.Coll also draws on Google’s submissions to Australian regulators describing potential consumer savings from lower developer fees. Google argues that those benefits depended on developers passing savings along. “Now, if pass on was not a realistic prospect, then that submission to the Australian regulator was nothing more than an empty promise,” said Ronit Kreisberger, a lawyer for Coll.Google insists its relationship with developers continues long after an app is downloaded. Play delivers updates, performs security checks and provides customer support, while helping developers reach users. Its commission model ties payment for those services to developers’ sales. “So whenever you make money, we make money,” said Google lawyer Kassie Smith.Coll’s claim invokes Britain’s Competition Act 1998 and, for the period before the end of 2020, European Union rules against abusing market dominance. She argues that Google insulated Play from competition that would have driven fees down. Google points to rival Android stores, developers’ websites and Apple devices as alternatives that already constrain its business.Both sides draw lessons from other app stores. Microsoft announced in 2021 that it would cut its share of PC game sales from 30% to 12%. Coll argues lower PC store rates show what stronger competition can deliver. Google disputes those comparisons, arguing that Epic’s 12% rate was unsustainable and that cheaper services do not offer everything Play provides.The tribunal questioned how each side’s reasoning would work in practice. It asked Coll how damages could be calculated if neither side’s figures proved reliable. She maintains that once consumer loss is established, the tribunal must estimate compensation. Google faced a different question: How could later purchases count as payment for the original download when a user might never buy anything?Hearings resume Thursday in a trial scheduled to run for about eight weeks, with witnesses and economists still to face questioning. Dame Kelyn Bacon, the presiding judge, said she had aimed to deliver judgment by summer 2027. Google wants her to wait for an Apple app store appeal scheduled, according to the hearing, for May 2027; Coll opposes delay. For now, consumers have a trial timetable, but no firm date for an answer.Courthouse News reporter Eunseo Hong is based in the NetherlandsSubscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads