Google considered changing its App Store pricing model to avoid regulatory action, but backed away from a proposal to charge a set fee for each app after it became clear it could cost billions.
The search giant founded Project Everest in 2021 to overhaul the in-store billing model, according to documents released as part of an antitrust lawsuit filed by Epic Games.
Last week, Google lost a lawsuit brought by the maker of Fortnite, in which a federal jury found that the tech giant had abused its monopoly power over the App Store.
Google wants to avoid potential regulatory violations as pressure grows from regulators and developers to impose hefty 30% commissions on the store, as described in the presentation.
“We can maintain the status quo for several months,” Google said in its presentation. “Early implementation of the proposed changes will help support sensible legislation, position Google as a market leader and prevent more stringent legislation.”
Project Everest plans to charge developers a tiered service fee for listing their apps or games in the Google Play Store, as well as charging additional fees for downloads, updates, and user referrals.
The company estimates that this model could lead to losses ranging from $1 billion to $2 billion for apps and $6 billion to $9 billion for games.
The employees suggested letting app developers process payments themselves and paying the company a small fee to do so.
Google estimates that the change will reduce the store's annual revenue from $250 million to $1.3 billion, depending on the number of users who choose other payment methods.
The decision largely mirrors the $700 million settlement Google announced last week with a group of attorneys general from nearly three dozen states.
Google's loss to Epic Games could weaken Google and Apple's monopoly on the App Store, which generates about $200 billion in revenue annually and determines how billions of consumers use their mobile devices.
Google's loss to Epic Games could accelerate the weakening of the App Store's rules, which have been criticized by regulators and lawmakers around the world.
Complaints from mobile app developers about excessive commissions are forcing them to charge consumers high fees, prompting countries like South Korea to require companies to open their app stores to alternative payment systems.
New EU regulations force Google and Apple to open stores.
Dozens of state attorneys general also filed a lawsuit against Google in 2021, accusing the company of using illegal methods to prevent competition and ensure that developers have no choice but to use the Google Play Store.
A few days ago, the states announced that Google would pay $700 million and allow developers to use its payment systems to settle the dispute.
The company said the fee will help it maintain its investment in Android and the store while reducing subscription fees. In addition, it will launch a “user choice billing” program in 2022, allowing app developers to process payments themselves and giving the company a 26% commission.