- The business’s action follows the European Parliament’s adoption earlier this month of the Digital Markets Act (DMA), which obliges tech behemoths like Google, Apple, Meta, and Amazon to adhere to fair and open market practices.
- Developers will pay a three per cent lower cost to Google Play when processing in-app purchases. If a third-party payment system is used, the company will cut its developer fee from 15% to 12% on the first one million dollars in revenue per year.
According to Google, developers of non-gaming apps from the European Economic Area (EEA), which includes all 27 EU countries as well as Norway, Iceland, and Liechtenstein, will now be able to use alternate billing methods for in-app transactions and purchases made on the Google Play Store. The business’s action follows the European Parliament’s adoption of the Digital Markets Act (DMA) earlier this month, which obliges tech behemoths like Google, Apple, Meta, and Amazon to adhere to fair and open market practices.
The business claimed in a blog post that the new legislation would require “Google Play and other industry players to adjust their current operating model for users in the European Economic Area (EEA).” Companies that violate these new regulations may be fined up to 10% of their global revenues. If a corporation commits a repeat offense, the fine may be increased to 20% of its global revenues.
“As part of our efforts to comply with these new rules, we are announcing a new program to support billing alternatives for EEA users. This will mean developers of non-gaming apps can offer their users in the EEA an alternative to Google Play’s billing system when they are paying for digital content and services,” Google said in a statement.
According to the tech giant, developers will pay a three per cent lower cost to Google Play when processing in-app purchases. And if a third-party payment system is used, the company will cut its developer fee from 15% to 12% on the first one million dollars in revenue per year. For subscriptions, Google charges a flat rate of 15%; the fee is as low as 10% for developers approved for the Google Play Media Experience program. Other developers will be required to pay a 30% fee after making their first million-dollar profit for the year.
According to Google, developers must uphold specific user protection requirements and follow additional service charge regulations. Those offering alternative billing for EEA users will no longer face update rejections, but they must continue utilizing Google Play billing for other regions.
Google is already providing an alternate billing method with a four per cent discount on fees in South Korea, which passed a regulation requiring app store operators not to restrict third-party payment choices for developers. American legislators are also considering introducing regulations to break Apple and Google’s stranglehold on app stores.
Regarding the use of third-party payment methods for in-app purchases, Google has reached various agreements with Spotify and Match Group this year for their apps sold through the Play Store. To resolve a lawsuit, the business decided to pay US-based developers USD 90 million in reimbursement for Play Store earnings earlier this month.