Apple implemented a similar change for the EU App Store earlier this year to comply with the Digital Services Act (DSA), a regulation that now requires app developers to provide their “trader status” to submit new apps or app updates for distribution.
I.e. it doesn't require this at all, it merely requires Google require verification for apps that they themselves distribute. What they've been doing all along until now plus or minus minor bookkeeping details on what data they collect.
For the record, Apple notes that the DSA requirements only impact developers distributing through the App Store, not through alternative distribution [1].
[1]: https://developer.apple.com/help/app-store-connect/manage-co...
That is most apps - but not the kind of apps Google is attacking here (personal-scale, actually-free, third-party, etc.). And "apps that are not monetized" is actually a very nice thing to filter for from a user perspective.
Of course, the world's largest malware vendors love to use government action as an excuse to do something else malicious.