Google Allows App Developers To Use Rival Payment Systems, Cuts Fees
Alphabet-owned search-giant, Google has announced a fee cut for non-gaming application developers on its Google Play App Store. The fees charged for using rival payment systems have been reduced to 12 percent, down by 3 percent from 15 percent, as the company seeks to comply with new European Union (EU) tech rules.
Currently, the fee cut is applicable only to non-gaming European application developers. The search giant plans to extend this freedom to gaming apps as well.
The EU rules, known as the Digital Markets Act (DMA), which comes into effect in 2023, require tech giants to allow application developers to use rival payment platforms for application sales or risk fines of as much as 10 percent of their global turnover.
The move reflects Google's shift in strategy, since last year, where it seems to have pivoted towards bowing to regulatory and antitrust pressure through offers of concessions rather than embarking on lengthy legal battles.
"As part of our efforts to comply with these new rules, we are announcing a new program to support billing alternatives for EEA (European Economic Area ) users," Estelle Werth, Google's director for EU government affairs and public policy, said in a blogpost.
"This will mean developers of non-gaming apps can offer their users in the EEA an alternative to Google Play's billing system when they are paying for digital content and services,” she added.
"When a consumer uses an alternative billing system, the service fee the developer pays will be reduced by 3 percent," she added.
"Since 99 percent of developers currently qualify for a service fee of 15 percent or less, those developers would pay a service fee of 12 percent or lower based on transactions through alternative billing for EEA users acquired through the (Google) Play platform."
Critics say the fees charged by Apple and Google at their mobile app stores are needlessly high and collectively cost developers billions of dollars a year.
Google has been hit with more than 8 billion euros in EU antitrust fines in the last decade for anti-competitive practices related to its price comparison service, Android mobile operating system and advertising service.
(Source: Reuters)
