In a move that can have major repercussions for the global tech giants and their respective anticompetitive lawsuits, Google on Wednesday announced that it is making the first move to add an option for third parties such as an app’s developers themselves to accept payments directly – without needing to pay Google its mandatory share. The pilot project begins with a “small number of developers”, Google said, which presently includes only Spotify. It will also be available only to a select few users.
Google and Third Party Payments: Why it Matters
In a blog post on Google’s Android Developers Blog, Sameer Samat, vice-president of product management at Google, says, “Based on partner feedback and in response to competition, our pricing model has evolved to help all developers on our platform succeed and today 99 percent of developers qualify for a service fee of 15 percent or less.”
He also adds, “We think that users should continue to have the choice to use Play’s billing system when they install an app from Google Play. We also think it’s critical that alternative billing systems meet similarly high safety standards in protecting users’ personal data and sensitive financial information. Together, Google and Spotify will work to innovate in how consumers make in-app purchases, deliver engaging experiences across multiple devices, and bring more consumers to the Android platform.”
The move can be a very significant one, especially in light of all the anticompetitive allegations being levelled – specifically at Apple and Google, in this case. For both the companies, their tussles with Epic Games have been highly notable. While Epic won a verdict against Google to continue the practice of getting users of its popular battle royale game, Fortnite, to make payments outside the app, Google responded by removing it from the Play Store. Epic has since cried foul regarding this, and a court battle between the two is scheduled for early 2023.
Apple has been a greater walled garden so far. The company has strongly defended its decision to tie down in-app purchases and payments only through its medium, and while an interim court judgement during its battle against Epic said Apple cannot stop app developers from notifying users about alternate payment methods through indirect channels such as email, Apple has contested for a stay order on this as well. The company has claimed that the investments it has made to make App Store a safe place warrants the cut that it charges from developers – which can rise up to as high as 30 percent.
Google’s present move with Spotify, therefore, comes as a bit of a surprise that bucks the trend established by the tech giants. Going forward, it remains to be seen how this trial is extended, and when it becomes more widely available for more users worldwide.