Google faces UK trial over app store commission claims

Google will face an 11-week UK trial over a class action by app developers worth more than £1 billion. The claim is being brought on behalf of thousands of developers represented by Professor Barry Rodger.

The case centres on commissions charged through the Google Play Store on app sales, subscriptions and in-app digital content. It covers UK-domiciled third-party app developers that sold through Google Play from August 2018 and paid commission to Google on those transactions.

The Competition Appeal Tribunal has rejected Google's attempt to require some larger developers to join the case on an opt-in basis. The proceedings will therefore continue as an opt-out collective action, with eligible developers included unless they choose to remove themselves from the class.

Rodger, a competition law academic at Strathclyde University Law School, is acting as class representative. He alleges that Google abused a dominant position in Android app distribution by using technical and contractual restrictions to limit competition, making Google Play the main route to market for developers seeking Android users in the UK.

The claim also alleges that Google charged excessive and unfair commissions of as much as 30% on app sales and related digital transactions. It seeks compensation for revenue developers say they lost as a result.

Google denies the allegations.

Commission dispute

The trial will focus on the commercial terms under which developers distributed apps and sold digital content on Android devices through Google Play. The claimant argues that in a more competitive market, developers would have paid less to distribute apps and process digital sales, allowing them to retain a greater share of revenue.

That argument goes to the economics of app businesses, particularly smaller companies that rely on mobile platforms to reach customers. For those businesses, app store commissions can affect margins, hiring plans and investment in new products.

The proceedings also add to wider scrutiny of app store operators and their control over app distribution and payments. In recent years, regulators and courts in several jurisdictions have examined whether rules imposed by major platform owners restrict rival app stores or alternative payment methods.

In the UK, the Competition and Markets Authority has designated Google as having strategic market status in relation to its mobile platform, including Android and native app distribution. In the European Union, the European Commission has issued preliminary findings under the Digital Markets Act concerning Google Play, including restrictions on steering users to alternative channels.

Courts in the United States and Australia have also considered Google's conduct in Android app distribution and in-app payments. Google's dispute with Epic Games in the US ended in a settlement under which it agreed to lower Play Store commissions for developers in future, though the settlement did not include compensation for earlier charges.

Trial focus

The UK case is likely to test both the structure of Android app distribution and the level of commissions charged through Google Play. It will examine whether developers had practical alternatives for reaching Android users and whether Google's terms reflected competition or market power.

The Tribunal's refusal to alter the class structure shortly before trial is also significant to the conduct of the case. Had the application succeeded, some larger developers would have had to identify themselves publicly and take active steps to join the claim or lose the chance to be part of any damages award.

Instead, the class remains in the form originally approved by the Tribunal, preserving the collective action as a broad claim on behalf of UK developers that fall within the class definition.

The case is one of the larger technology competition actions heading to court in the UK and reflects growing use of collective proceedings in disputes involving digital platforms. It also highlights continuing efforts by claimants to recover damages for what they describe as inflated costs imposed by powerful technology intermediaries.

Rodger said the case was aimed in part at smaller businesses with limited scope to avoid the Play Store if they wanted to reach Android customers.

"This is a significant moment for UK app developers. Many small businesses have had little realistic choice but to use Google Play Store to reach Android customers. The cost of doing so, we believe, was excessive and unfair," said Professor Barry Rodger, class representative.

He added: "A landmark trial against Google is right around the corner."

Rodger also said: "Any UK app developers who think they are affected should get in touch confidentially at www.googleplaystoredeveloperclaim.com/register. It takes minutes and it costs nothing."