According to court filings unsealed this week, Google Play earned a profit of $8.5 billion on revenues of $11.2 billion in 2019. Even more incredibly, the mobile app store had an operating margin of 62 percent that year. (The operating income was $7 billion.)
Right. This means that Google could very easily afford to charge developers a lot less than it does and still be wildly and even unfairly successful. And just imagine how heady the figures are for Apple’s App Store, which is even more successful.
The disclosure came as part of one of the many antitrust lawsuits that Google now faces for its abusive business practices in the mobile app store market. The US attorneys generals behind this particular suit argue that Google generates huge profits by “arbitrarily” charging developers up to 30 percent for doing little more than hosting their apps. And these numbers help confirm that belief.
Google, of course, disagrees.
“The data are being used to mischaracterize our business in a meritless lawsuit,” Google told Reuters.
This is the first time that Google Play’s profits, revenues, and margins have ever been revealed: Alphabet, Google’s parent company, hides those figures inside of a broader business category in its quarterly financial results.
And the disclosure comes amidst a new round of criticism of the online giant’s app store. As part of a separate lawsuit, Fortnite maker Epic Games disclosed that Google secretly struck anticompetitive deals with and/or threatened rival app and game makers like Riot Games to prevent them from bypassing its Play Store, as Epic had done. And internal Google documents show that the firm feared losing over $1 billion in annual profits because Epic bypassed the store with Fortnite.