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Thursday, August 22, 2019  Spokane, Washington  Est. May 19, 1883
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Tinder bypasses Google Play joining revolt against app store fee

In this July 5, 2015,  photo, a man uses the dating app Tinder in New Delhi. (Tsering Topgyal / Associated Press)
In this July 5, 2015, photo, a man uses the dating app Tinder in New Delhi. (Tsering Topgyal / Associated Press)
By Olivia Carville Bloomberg

Tinder joined a growing backlash against app store taxes by bypassing Google Play in a move that could shake up the billion-dollar industry dominated by Google and Apple Inc.

The online dating site launched a new default payment process that skips Google Play and forces users to enter their credit card details straight into Tinder’s app, according to new research by Macquarie analyst Ben Schachter. Once a user has entered their payment information, the app not only remembers it, but also removes the choice to swap back to Google Play for future purchases, he wrote.

“This is a huge difference,” Schachter said in an interview. “It’s an incredibly high-margin business for Google bringing in billions of dollars,” he said.

The shares of Tinder’s parent company, Match Group Inc., spiked 5% when Schachter’s note was published on Thursday. Shares of Google parent Alphabet Inc. were little changed.

Apple and Google launched their app stores in 2008, and they soon grew into powerful marketplaces that matched the creations of millions of independent developers with billions of smartphone users. In exchange, the companies take as much as 30% of revenue. The app economy is expected to grow to $157 billion in 2022, according to App Annie projections.

As the market expands, a growing revolt has been gaining steam over the past year. Spotify Technology filed an antitrust complaint with the European Commission earlier this year, claiming the cut Apple takes amounts to a tax on competitors. Netflix Inc. has recently stopped letting Apple users subscribe via the App Store and Epic Games Inc. said last year it wouldn’t distribute Fortnite, one of the world’s most popular video games, through Google Play.

Match declined to answer questions about whether the company was also investigating bypassing Apple’s App Store. Match is expected to discuss the payment flow change with analysts and investors during its next earnings call on Aug. 6.

“At Match Group, we constantly test new updates and features to offer convenience, control and choice to our users,” Justine Sacco, a spokeswoman for Match, wrote in an email. “We will always try to provide options that benefit their experience and offering payment options is one example of this.”

Google didn’t immediately respond to requests for comment.

Of the high-profile companies that have shunned the App store, Match is the only one that has changed the payment method in-app, Schachter noted. Others have instead forced subscribers back to their own websites to enter payment information.

Tinder’s move could spark a domino effect.

“Tinder is relatively small and it won’t have a massive impact, but the concern is if this grows and gets into gaming apps as it starts moving forward,” Schachter said. “We’re going to see a lot of other companies potentially trying to experiment with this.”

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