Even though Epic ‘Games faced defeat at the hands of the U.S. Supreme Court in its battle against Apple, the aftermath of the trial has ultimately taken more steps towards the goal of alternate payment methods than Epic’s immature party trick. Big Tech is finally cracking under the new, stricter laws imposed by European nations, and this is just one of the many updates that are about to follow in this chain of events.
Google has just announced that it would allow “non-gaming apps” on Android to bill its users outside of the Play Store. Essentially, enabling developers to use alternate, third-party payment systems for their apps. The important thing to note here is that this only applies to users residing inside the European Economic Area (EEA).
Developers who choose to use an alternative billing system will need to meet appropriate user protection requirements, and service fees and conditions will continue to apply in order to support our investments in Android and Play.
Outside of EEA countries, and for gaming apps that don’t come under Google’s definition of what a game is, developers will still be required to use the Play Store’s built-in payment system. But, Google does promise that they will expand their alternative billing liberty to gaming apps before the DMA deadline gets here.
Speaking of which, DMA, aka the Digital Markets Act, is basically the reason behind why Google is playing nice guy all of a sudden. The DMA is a set of newly-approved rules by the European Union for companies that operate in the tech sector. These laws are in place to prevent anti-competitive practices, coerce Big Tech to be more transparent about their policies—data collection, in specific—and to ensure a fair market for everyone.
Under the DMA, large corporations like Google would now be forced to comply with new rules for alternate payment systems; putting the choice in the users hands’. Circling back to Google’s announcement, even though the company has said it will allow third-party billing options, Google will still take a percentage of all transactions.
Google’s revised shares
Currently, about 99% of apps on Google Play qualify for a 15% (or less) cut from their revenue. With today’s update, Google has dropped down that figure to just 12% (or less) across all non-gaming apps. Interestingly, Korean developers will get one extra percentage of leniency as they will have to pay only 11% of their earnings to Google.
The reason for this, according to Google, is “to support our investments in Android and Play“. So, the main reason why so many developers—including Epic—yearned for external payment methods is kind of negated here.
The need for third-party payment solutions exists in the first place because companies like Google, Apple, and Microsoft take a large chunk of the developers’ earnings just for hosting the app on their platform. Apple used to snag up to 30% as part of their fees, a number that was lowered down to 15% in the wake of the Epic Games trial.
Moreover, Google points out that it will not take down or take any action against non-gaming apps that offer alternative billing systems for users inside the EEA, applicable from now on. The deadline for implementing this change is still far from here but Google has apparently taken this decision early on to better plan for the future.
Although the DMA does not take effect for some time, we are launching this program now to allow us to work closely with our developer partners and ensure our compliance plans serve the needs of our shared users and the broader ecosystem.
You can check out the full blog post for more details here.