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From: Glenn Petersen9/28/2020 3:27:58 PM
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Google to enforce 30% cut on in-app purchases next year

PUBLISHED MON, SEP 28 20202:13 PM EDT
Kif Leswing @KIFLESWING
CNBC.com\
KEY POINTS

-- Google said Monday it will enforce rules that require app developers distributing Android software on the Google Play Store to use its in-app payment system.

-- The move means that developers who have had customers pay them directly with a credit card for digital content will soon have to use Google’s billing system, which takes a 30% fee from payments.

-- Google’s existing policy said that developers needed to use Google’s billing system on in-app purchases made within the Google Play store, but it had not been enforced.

Google said on Monday that it will enforce rules that require app developers distributing Android software on the Google Play Store to use its in-app payment system.

The move means developers have until Sept. 30, 2021 to use Google’s billing system, which takes a 30% fee from payments, instead of independent payment systems. The announcement brings Google Play’s policies in line with Apple’s App Store policies, which have come under fire from developers and regulators over several issues, including its own 30% cut.

Apple has argued against scrutiny of its App Store by pointing out that other app stores, like Google Play, also take a 30% fee from in-app purchases.

Google’s existing policy said developers have to use Google’s billing system on in-app purchases made within the Google Play Store, but it had not been enforced, Google said on Monday in a blog post.

Google didn’t name apps that had been skirting the rule. It said 97% of developers selling digital goods already comply with its policies. Netflix and Spotify prompt users inside their Android apps to use a credit card to pay them directly.

“We want to be sure our policies are clear and up to date so they can be applied consistently and fairly to all developers, and so we have clarified the language in our Payments Policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play’s billing system,” Google said in the announcement, signed by Sameer Samat, a VP of product management.

Epic Games, the maker of Fortnite, updated its Android software in August to allow gamers to directly pay Epic for in-app purchases of digital goods like colorful outfits, which circumvented Google Play billing.

Google responded by removing Fortnite from the Play Store. “While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies,” Google said at the time. Epic Games sued Google.

Apple also removed Fortnite from its App Store and is embroiled in its own legal battle with Epic Games.

Google’s Play Store doesn’t attract as much attention as Apple’s App Store
Google has received significantly less attention than Apple over its 30% cut, even though its policies are similar to Apple’s.

One core complaint from Apple developers is that Apple takes 30% from digital purchases made within the app, which can hamper services like Spotify, which have significant costs associated with their services like rights to music.

Android allows users to install apps without using the Play Store, including apps that distribute other apps, such as Samsung’s Galaxy App Store, the company pointed out in its Monday blog post. But, the Google Play Store is the way most users download applications on an Android phone.

Google hasn’t taken as much heat on its cut of in-app purchases, however.

Developers including Epic Games, Spotify, and Tinder parent company Match have created a nonprofit group to challenge Apple’s App Store practices, for example.

And, when Apple CEO Tim Cook testified in front of the House Judiciary subcommittee on antitrust this summer, he answered specific questions about which apps Apple allows on its platform and how it uses its power to hamper smaller developers.

When Google CEO Sundar Pichai testified at the same hearing, he faced questions about Google’s role in advertising, search, and data collection, instead of how much Google charges app-makers to use the Google Play store.

Google said next year’s Android release will “make it even easier for people to use other app stores” without compromising user security.

cnbc.com
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