Google plans to enforce its Play Storepolicies that will require app developers selling digital goods to use its in-app payment system, giving the tech giant a 30% commission for each transaction.
“We have clarified the language in our Payments Policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play’s billing system,” Sameer Samat, vice president of Product Management at Google, said in a blog post.
To be sure, this policy isn’t exactly new. The Internet giant has always required developers selling virtual goods on its apps to use its in-app payment system, however, Google hasn’t necessarily enforced this rule. This led to companies like Spotify, Netflix, and more recently Epic Games to circumvent the payment system in favour of their own, in a bid to avoid giving a 30% cut to Google.
This clarification from Google brings its policies on par with Apple. Developers, however, will be able to communicate to their customers alternative ways to make transactions, Samat noted.
“Google Play does not have any limitations here on this kind of communication outside of a developer’s app. For example, they might have an offering on another Android app store or through their website at a lower cost than on Google Play,” he said.
App Store commissions have become a contentious issue across the world, especially since these platforms have become the default channel for developers to distribute their apps. Several app developers have raised concerns on these fees being ‘very high’ and ‘unfair’. Last month, Epic Games had sued Apple and Google, over removal of the popular game ‘Fortnite’ from their respective app stores for alleged violation of app store policies of both tech giants.
In the blogpost, Samat noted that only 3% of developers don’t use Google Play’s billing system as of now, who will have to comply by these rules by September 30, 2021. Google will also be making changes in Android 12 to make it even easier for people to use other app stores on their devices.
“We only collect a service fee if the developer charges users to download their app or they sell in-app digital items, and we think that is fair. Not only does this approach allow us to continuously reinvest in the platform, this business model aligns our success directly with the success of developers,” Samat said.
Apart from commission fees, Google is also facing app store monopoly concerns in India after it briefly took down Paytm earlier this month for alleged violation of its app policies. Android powers around 98% of the smartphones in the country, according to the research firm Counterpoint Research.
In an interview with ET, Paytm chief executive Vijay Shekhar Sharma had termed this move as “arbitrary” and had stated plans of forming a coalition of domestic startup founders in its ‘fight’ against the Internet giant.
“The point is that Google owns the gate and the gateway to the digital ecosystem of this country. We may choose to accept it or not. My intent always is that Indian startups should get a level playing field and foreign giants should follow the rules.” Sharma said in the interview.
Read full interview: No American or foreign company should control the destiny of Indian startups: Vijay Shekhar Sharma
PhonePe co-founder Sameer Nigam had also backed Paytm’s action and said the Internet giant’s guidelines need more scrutiny from India’s antitrust regulator. “The problem is Play Store distribution gives every Google vertical product, a huge distribution edge, where we spend hundreds of millions of dollars, they get it for free. For years, you could not advertise on any Google brand name. I could not advertise against Google Pay. But every single PhonePe or Paytm user sees a download Google Pay app ad on Play Store every single time,” Nigam said.
While Google didn’t address this issue specifically, Samat reiterated in the blogpost that these policies apply to their own apps as well. “We use the same standards to decide which apps to promote on Google Play, whether they’re third-party apps or our own apps. In fact, we regularly promote apps by Google’s competitors in our Editors Choice picks when they provide a great user experience. Similarly, our algorithms rank third-party apps and games using the same criteria as for ranking Google’s own apps” he said.
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