Google has just made several major announcements this Tuesday, July 19, 2022. First, the firm allows app developers to use competing payment systems. In addition, the Play Store commission levied on in-app purchases made via its application store is now 12% instead of 15%.
Has Google finally decided to make concessions in order to avoid long and costly antitrust lawsuits? It looks like it. Indeed, the Mountain View firm has just announced this Tuesday, July 19, 2022 major changes.
As you may know, developers who offer apps on the Google Play Store that show $1 million or less in revenue have to pay a commission to Google. Previously set at 30%, the value of this tax rose to 15% in March 2021. A decision also taken by Apple a few months earlier.
However, we have just learned that the amount of these fees now increases to 12% for developers non-game applications available on the Play Store. The company specifies that the tax reduction applies only in Europe. Otherwise, developers can now opt for competing payment systemswhile this “freedom” will be extended to mobile games soon.
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Google reduces the amount of Play Store commission in Europe
As a reminder, new EU rules, known as the Digital Markets Acts (DMA), require GAFAMs to allow app developers to use competing payment platforms for app sales (and in-app purchases), or face a fine of up to 10% of their worldwide turnover.
“As part of our efforts to comply with these new rules, we are announcing a new program to support billing alternatives for users in the EEA (the European Economic Area)”, said Estelle Werth, director of EU government affairs and public policy at Google, in a official blog post.
According to the manager, developers who choose to use an alternative billing system will have to “meet appropriate user protection requirements, and fees and terms of service will continue to apply to support our investments in Android and Play.”
In fact and when a consumer uses an optional payment system to buy an app or make in-app purchases, service fees paid by developers will be reduced by 3% (i.e. 12% in total). The framework also recalls that 99% of developers currently meet the conditions required to benefit from service fees of 15% or less.
