UK Android app devs to get choice of billing system on Google Play
Coalition for App Fairness calls tech giant's proposal 'a bad deal'
Updated The UK's Competition and Markets Authority (CMA) says Google has promised to allow developers in the country to use alternative payment options after investigating the tech giant's control over Google Play in-app purchases.
Under the new UK proposals, if the CMA signs off on the commitments, instead of obliging devs to use Google Play's own billing system for in-app purchases, they will be able to offer a different payment system of their choosing, dubbed "Developer-only Billing."
They may also offer users a choice between an alternative payment system and Google Play's billing system, known as "User Choice Billing" (UCB).
Back in August 2021, the South Korean parliament passed a law that banned major app store operators from requiring that developers use only the platform-endorsed payment system for in-app transactions.
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By March 2022, the Alphabet-owned company said it was piloting third-party payment systems' access to its Play Store – with Spotify as the canary. By November last year, it had expanded the app dev billing pilot to include the US, Brazil and South Africa, with dating app Bumble joining Spotify as one of the pilot testers. But before devs could get too excited, it told them that "for participants in this pilot, service fees, which support our investments in Play and Android, will continue to apply. Developers must pay Google the applicable service fees. When a consumer chooses to use an alternative billing system, the service fee the developer pays will be reduced by 4 percent."
Google appears to have been less generous with its price cut when it met with EU regulators in July last year, and announced that it would begin to let app developers in the European Economic Area use alternative billing systems: purchases made through the alternatives would have developer fees reduced by just 3 percentage points.
Nonetheless, it 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 Play platform."
Critics not convinced
Rick VanMeter, executive director at the Coalition for App Fairness, told The Reg: "Google's proposal to allow third party payment options is nothing more than a reallocation of fees. This proposal would enable them to continue taking a massive cut on services they do not even provide.
"This solution will not create meaningful competition and is a bad deal for developers and consumers. We will continue working with the CMA to bring real competition to the mobile app ecosystem."
Taking a closer look at the CMA proposals this morning, Developer-only Billing for UK devs will also include a dip in the service fee (which can be up to 30 percent per in-app transaction) by at least 3 percentage points. The CMA said this reflected "the fact that developers will incur costs in offering alternative payment processing and associated services."
It also proposed a "process for the reporting of in-app purchases turnover to Google either manually or using APIs, in order for a service fee to be calculated on in-app transactions" – something devs might want to take a closer look at here [PDF]. Google has committed not to "engage in any retaliatory measures directed at a Developer or its users for the reason of that Developer having chosen to offer User Choice Billing or Developer-Only Billing in accordance with these Commitments."
Under UCB, Google would reduce its service fee by at least 4 percentage points.
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We've asked Google if it breaks down costs for devs.
The tech giant, echoing Apple's comments on such matters, has always defended the commission it takes when critics have said 30 percent is much too large of a take. Both tech companies claim they sink a lot of resources into maintaining their respective stores, weeding out malware, and keeping them secure and updated.
The CMA's Mobile Ecosystems Market Study published a final report [PDF] in 2022, which found Google Play accounted for 30 to 40 percent of all net revenue generated by UK consumers using in-app payment systems and that in 2021, the average cut Google Play took was between 25 and 30 percent.
Ann Pope, senior director of Antitrust at the CMA, said: "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.
"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."
The CMA probe took place under the UK's Competition Act 1998.
Updated to add:
Google confirmed that in both the UK and EEA, alternative billing will bring a 3 percentage reduction in fee. It said in a post about the issue: "We appreciate the CMA's thoughtful approach and the constructive dialogue we've had throughout this process. As always, we'll continue to listen to feedback and continue to invest to help developers thrive on Google Play.
"The CMA will consider the feedback from the consultation before deciding whether to make the commitments legally binding."