Google to enforce 30% cut from app developers in Play Store

Google said it will no longer allow apps inside it’s Play Store to avoid the payment system that provides the US-based tech giant with a cut off from in-app purchases.

In a recent blog post, Google said it wanted to provide “clarity” on billing policies because there was uncertainty among some developers about what kind of transactions require the use of its app store’s billing system.

Google has had the policy to take a 30 percent fee from the in-app payments made on apps offered by the Google Play store, but some developers, including Netflix and Spotify, have circumvented the requirement by prompting users to pay directly using a credit card.

Google said businesses have until September 30, 2021 to incorporate its billing systems.

The announcement puts Google Play’s policies in line with Apple, the iPhone maker’s, App Store policies, which have come under fire over several concerns from developers and regulators, including its own 30 percent cut.

In recent months, the way that Google and Apple app stores collect fees has become a highly controversial topic. This aspect of the companies came under the spotlight especially after Epic Games, the maker of the popular game Fortnite, sued Apple and Google, alleging they breached antitrust laws with the commissions they charge.

Epic Vs. Google and Apple

In August, Epic Games updated its Android software to allow gamers to pay Epic directly for in-app purchases of digital products such as colorful costumes, which avoided Google Play’s and Apple Store’s billing and hence their 30 percent cut.

Google responded by removing Fortnite from the Play Store while Apple also did the same. Epic Games sued both Apple and Google and are engaged in an ongoing legal battle.

Dissatisfied Developers

App developers have expressed dissatisfaction at Google and Apple’s demand for a 30 percent cut, claiming it is an inflated digital tax that impacts their ability to compete. But since almost all of the world’s smartphones are controlled by the two firms, many developers complain that they have no choice but to stick to their policies and pay commissions.

A group of app developers said last week that they had founded the non-profit App Fairness Coalition to advocate for app store reforms and “protect the app economy.” The initial 13 members include Spotify, Basecamp, Epic and Match Group, which has apps such as Tinder and Hinge.

But it is noteworthy that Google has received slightly less backlash than Apple for the 30% cut policy, even though they are similar to that of the iPhone makers.

Google pointed out in its blog post that Google Play Store is not the only way that Android allows users to install apps, there are other options such as Samsung’s Galaxy App Store. But its true that most people use Google Play Store to download apps on android phones.