Google Will Enforce A 30% Cut To In-App Purchases From Next Year
On Monday, Google announced in a blog post that it was clarifying its billing policies since some developers seemed confused as to which transactions must go through its app store billing system. In the past, some developers, like Netflix and Spotify, have circumvented the system and avoided paying Google 30% for in-app purchases by prompting users to pay them directly.
Now, Google says it will no longer allow apps to bypass the requirement, giving companies until September 30 to integrate their billing systems. Google and Apple have been recently sued by Epic Games, which publishes Fortnite, Infinity Blade, Shadow Complex, and Bulletstorm, among others, for violating antitrust rules with their commissions.
Epic has argued that Apple has a monopoly over the app distribution market and that Google has refused to allow users to use its own, lower-priced, billing system before removing Fortnite from its app store. Developers claim the 30% cut imposed by Google and Apple, who control most of the world’s smartphones, hinders their ability to compete.
Last week, a group of app developers formed the nonprofit Coalition for App Fairness to demand changes in the app stores and “protect the app economy.” Members include Spotify, Basecamp, Epic and Match Group. Sarah Maxwell, a spokesperson for the Coalition for App Fairness, said the group looks forward to “engaging with Google” to ensure changes adhere to its principles and are “in the best interest of app developers.”
Google says its billing policies only apply to a small number of app developers, claiming only 3% of app developers on Google Play offer in-app purchases, and of those, only 3% don’t use Google’s billing system. Google also maintains that it lets some companies operate app stores within its Android software and would update next year’s version of Android to facilitate the use of other app stores on its devices.
Although Google claims Epic benefits from Android’s third-party app stores since Fortnite is available on Epic and Samsung’s app stores, Epic argues Google holds a monopoly over app distribution given that more than 90% of apps on Android devices are downloaded through the Google Play Store.
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