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Last week , Google and Match reached a settlementin the app fund antitrust case where Match had try the right to offer its users an alternative to Google Billing in an cause to stave off Google ’s Play Store commissions on in - app purchases . As a part of the agreement , Match said it would implement Google ’s unexampled User Choice charge option , which allows app developers to use their own requital system for a 4 % discount rate ( i.e. , instead of 15 % or 30 % , as is standard , developers pay 11 % or 26 % , respectively . ) But followingMatch ’s Q3 pay , it ’s becoming clear that a charge change is n’t the only reason the dating app maker agreed to settle . It appears the terminal figure of the deal , while confidential , may have been of majuscule benefit to Match from a fiscal perspective — total more than $ 300 million , in fact .
The adoption of User Choice Billing on its own is not really a win for an app developer because a 4 % reduction in fees is often not enough to cancel the cost of the fees assort with running your own payment processing , where fees could range between 3 % to 6 % . In other words , User Choice billing is not always a cheaper option than Google Play Billing and it sometimes be even more . ( In fact , it ’s suspected that Google may have negotiated a peculiar deal with Spotify , an other adoptive parent of User Choice Billing , asit ’s been asking to varnish part of an exhibitthat would detail its Spotify deal in theongoing Epic - Google antitrust lawsuit . )
So what would have prompted Match to settle ? Money , it seems . And the answers as to how much may lie in in Match CFO Gary Swidler ’s statements to investor on Match ’s Q3 earnings call with investor , where the pile was discussed .
He highlighted that Google had been seek damages going back to October 2021 , followinga changeGoogle apply in its charge policies . It wanted Match to escrow $ 40 million to account for the unpaid perpetration ( or Play Store service fees ) that the date app maker owe for the requital it processed outside Google Play while the lawsuit was underway .
But more late , Google had crusade Match to put more money in escrow , saying that the original figure of $ 40 million was no longer enough . It had realise that Matchdisclosed in its Q1 2022 earningsthat the incremental price to adopt Google Play Billing was $ 6 million per calendar month . If Google require to amass the “ correct ” amount of lose service of process fee from October 2021 through the end of this twelvemonth , December 2023 , at a rate of $ 6 million per month , then that would come $ 162 million .
As Swidler noted on the recent Q3 net call , “ … as part of the settlement, … we basically agreed that we wo n’t owe any amount prior to the end of this class , and so what that means is everything that we ’ve been processing on quotation cards for the last two - plus age there ’s no incremental fees owe . ”
That mean that not only does couple get to keep the $ 40 million it had put in escrow , it also does n’t have to compensate the “ real ” total of miss service fees to Google , which would have been $ 162 million ( this would include the existing $ 40 million in escrow ) . That ’s a substantial win for Match .
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But that ’s not the only financial constituent of the settlement . As Swidler also assure investor , there was a “ second piece of value ” to the wad with Google , where he referred to the company ’s broader partnership with the technical school giant which includes dispersion , marketing , and cloud service .
Said Swidler , “ … and as a result of the new wide partnership , we ’re locomote to get benefit such that we essentially countervail the impact of the implementation of User Choice Billing , and so we view that as largely inert in the ’ 24 , ’ 25 , and ’ 26 stop . ”
Breaking this down further , that imply over a 36 - month period , the cost of implementing User Choice Billing — mean bear Google the want service fee and pay its own payment processing fees — is going to be “ offset ” by whatever Google is giving Match .
We do n’t bonk what Match ’s defrayal processing fee would be for the payments it handles itself . Perhaps it ’s saving a slight money over Google Play Billing , or perhaps it ’s paying a footling more — because , as noted , the deduction Google offers in User Choice Billing often does n’t fully cover requital processing fee . However , we can still utilize the previously disclose $ 6 million per calendar month figure as an estimate to determine how large this “ offset ” bod could be . Over 36 month — 3 years — at $ 6 million per month , that would get you to $ 216 million .
So , even by buttoned-down appraisal , Match ’s closure with Google seems to be a deal that net the dating app Godhead well more than 300 million dollar . Well , no curiosity it settled !
The inquiry this raises , then , is why wouldGooglesettle if this was the price of doing so ? Perhaps it felt it made more sense to just concentre on the antimonopoly conflict with Epic Games , which is being debate now , rather than allowing Match to evidence its story to the court of law , too .
We ’re also curious to see what Google may have offered in its settlementwith the grouping of U.S. statesthat had previously been involved with this antimonopoly causa , as well . The country attorneys generalagreed to go under their casing with Google in September , forward of the Match closure . The terms of that batch were n’t immediately expose , because a judge still has to approve the nail down settlement , but those details should become public in the time to come .
Match and Google can not comment publically on the liquidation , which is confidential .
