Google is to let Android developers bypass in-app payments on its Play app store for the first time, in an effort to head off an investigation from the British competition regulator.
But the specifics of the deal to placate the UK’s Competition and Markets Authority (CMA) will give little cause for cheer to independent developers who have been campaigning against “app store taxes”, since Google will continue to collect a “service fee” for all eligible purchases on its platform.
That means the changes will knock just a few percentage points off the bill for those developers who handle their own payments.
“Google Play has been the launchpad for millions of apps, helping developers create global businesses that support a quarter of a million jobs in the UK alone,” Google’s legal director, Oliver Bethell, said in a statement. “Today we are announcing a set of potential commitments in relation to our billing policies in the UK to resolve the CMA’s investigation.”
Previously, a typical developer who offered digital goods for sale using in-app purchases would have to pay a 30% cut to Google of the sticker price. Now, if they choose not to use Google’s payments services, they will still have to pay a 27% cut of the revenue to Google, plus any fee to their own payment processor, which typically comes in at around 3%. If they offer a choice between Google’s payments and their own, an extra one percentage point discount is applied.
In a statement, the CMA’s senior director of antitrust, Ann Pope, cautiously welcomed the commitment. “Google’s complete control over in-app payments raised concerns this unfairly restricted app developers – by forcing them to use Google Play’s billing system – putting distance between them and their customers and reducing competition, to the detriment of Google Play users,” she said.
“While we’re pleased our investigation has resulted in Google offering to give in-app payment freedom to thousands of app developers, we need to make sure these commitments will work in practice – so we welcome all feedback, which we will carefully consider before making a final decision.”
Both Google and Apple, which faces similar regulatory pressures over its control of the iOS App Store, have offered similar concessions in other jurisdictions around the world.
In 2022, Apple complied with the Dutch competition regulator by cutting its own commission on in-app purchases from 30% to 27% for users who paid with a third-party payment processor. That decision sparked scathing criticism from independent developers such as Steve Troughton-Smith, who wrote that it was “absolutely vile”.
