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Google will impose a 30% reduction on in-app purchases next year

Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum (WEF) annual meeting in Davos on January 22, 2020.

(Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI / AFP via Getty Images)

Google said on Monday it will enforce rules requiring app developers who distribute Android software on the Google Play Store to use their own in-app payment system.

The move means developers have until September 30, 2021

to use Google’s billing system, which requires 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 been criticized by developers and regulators on several issues, including its 30% cut.

Apple has opposed control of its App Store by pointing out that other app stores, such as Google Play, also take a 30% commission from in-app purchases.

Google’s existing policy states that developers must use Google’s billing system for in-app purchases made within the Google Play Store, but it hasn’t been enforced, Google said in a blog post on Monday.

Google didn’t name apps that were circumventing the rule. It said 97% of developers selling digital goods already comply with its policies. Netflix and Spotify require users within their Android apps to use a credit card to pay directly.

“We want to make sure our policies are clear and up-to-date so that they can be applied consistently and fairly to all developers, so we have clarified the language in our payments policy so that it is more explicit than all the 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, vice president of product management.

Epic Games, the creator of Fortnite, updated its Android software in August to allow players to pay directly to Epic for in-app purchases of digital goods such as colorful clothing, which bypassed Google Play billing.

Google responded by removing Fortnite from the Play Store. “Even though 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 is suing Google.

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

The Google Play Store doesn’t attract as much attention as the Apple App Store

Google has received far less attention from Apple than its 30% cut, even though its policies are similar to Apple’s.

A major complaint from Apple developers is that Apple takes 30% off digital purchases made within the app, which can hinder services like Spotify, which have significant costs associated with their services like music rights.

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 blog post on Monday. However, the Google Play Store is the way most users download applications to an Android phone.

However, Google hasn’t taken much heat from cutting in-app purchases.

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

And, when Apple CEO Tim Cook testified before the House Judiciary’s Subcommittee on Antitrust this summer, he answered specific questions about which apps Apple allows on its platform and how it uses its power to obstruct smaller developers.

When Google CEO Sundar Pichai testified in 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 release of Android “will make it even easier for people to use other app stores” without compromising user security.

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