Google has announced on Monday that it would update its billing policies for app developers. This means that the company will not allow any apps to ‘evade’ its payment system from now on, which is implemented within the Google Play Store and brings the company a cut of in-app purchases.
The tech giant said it was providing ‘clarity’ on billing policies with this new announcement because there was allegedly some confusion among some developers about what kinds of transactions require the use of its Google Store Play billing system.
Google Play Store Commissions
Google has had a regulation of taking a 30 percent cut of payments made within apps provided on the Google Play Store, but some developers, such as Netflix and Spotify, have dodged the requirement by leading users for a credit card to pay them directly. Google also demanded that companies had until September 30th, 2021, to incorporate its billing systems.
The way the Google and Apple app stores get their fees has become a rather controversial issue in the last few months after Epic Games sued both Apple and Google, arguing they violated antitrust regulations with the commissions they demand.
On Monday, a federal judge in California’s Northern District Court in Oakland heard testimony from Epic Games as well as Apple to estimate whether Apple can continue to ban Fortnite, the gaming studio’s popular title, from its App Store. The case goes to trial sometime in 2021.
In its lawsuit against Google, Epic Games revealed it tried to provide users with the option to use its own billing system, which costs way less than Google’s. The gaming studio said Google did not consider the app both times it was proposed, and when the game maker went ahead and developed it anyway, Google removed Fortnite from its store.
The Coalition for App Fairness Goes Against App Stores
Developers have raged at the 30 percent cut claimed by Google and Apple, saying it is an exaggerated digital tax that limps their ability to compete. And because the two companies control almost all of the globe’s mobile devices, many developers protest that they have no option but to comply with their policies and pay the inflated commissions.
Last week, a group of app creators said they had formed the nonprofit Coalition for App Fairness to demand changes in the app stores and ‘protect the app economy.’ The 13 original members include Spotify, Basecamp, Epic, and Match Group, which has apps like Tinder and Hinge.
Sarah Maxwell, a spokesperson for the Coalition for App Fairness, said in a statement that the assembly looked forward to ‘engaging with Google’ to make sure that any changes match its principles and are in the best interest of app creators.
Google claimed that the implementation of its billing rules would apply to a minor fraction of its app developers, as only 3 percent of app creators on its Google Play Store offered in-app purchases.
Google is also preparing for another scrutiny, as the Justice Department and a coalition of state attorneys general are set to bring antitrust lawsuits against the giant for the unlawful way it exerts its dominance in web search and digital advertising methods.