The UK regulator is seeking opinions on the practical implementation of a proposed move, due to worries over the portion of in-app purchases retained by tech companies.
In order to prevent an investigation by the British competition regulator, Google will permit Android developers to circumvent in-app payments on its Play app store for the first time. However, the details of the agreement reached with the UK’s Competition and Markets Authority (CMA) are unlikely to please independent developers who have been protesting against “app store taxes”, as Google will still collect a “service fee” on all eligible transactions made through its platform.
This indicates that only a small fraction of the charges will be eliminated for developers who manage their own payment processing, as a result of the modifications.
In a statement, Oliver Bethell, Google’s legal director, stated that Google Play has served as the starting point for millions of apps, enabling developers to establish worldwide enterprises that support a quarter of a million jobs in the United Kingdom alone. Today, we are revealing a set of prospective agreements with respect to our billing policies in the UK in order to settle the CMA’s inquiry.
Earlier, a developer who sold digital goods via in-app purchases was required to pay Google a 30% cut of the sticker price. Now, if they decide to forgo Google’s payment services, they will still owe Google a 27% portion of their income, as well as any fees charged by their own payment processor, which typically amount to around 3%. If they offer a choice between Google’s payments and their own, an additional one percent discount is provided.
Ann Pope, the CMA’s senior antitrust director, expressed cautious satisfaction with the agreement in a statement. She stated that Google’s total control over in-app payments was concerning because it unfairly restricted app developers by compelling them to use Google Play’s billing system, separating them from their customers and stifling competition, all to the detriment of Google Play users.
Google and Apple, both of whom are facing comparable regulatory demands for their management of the iOS App Store, have proposed comparable compromises in other regions throughout the globe.
In 2022, Apple adhered to the Dutch competition regulator’s rules by lowering its fee on in-app transactions from 30% to 27% for customers who utilized a third-party payment processor. This action prompted harsh condemnation from independent developers, including Steve Troughton-Smith, who referred to it as “utterly repugnant.”
