The search engine giant Google has been fighting a legal battle with India’s Competition Commission of India (CCI). A few months back, the authority had informed the search engine giant to modify its approach towards smartphone OEMs. They had suggested many new directions and imposed a penalty of Rs 1,338 crore for exploiting its dominant position in the Android smartphone market. Google has now announced that the app will allow its app developers to offer a third-party billing system for in-app purchases. The alternate billing system will be available in India from April 26, 2023.
Everything to Know About Google’s Announcement Regarding Third Party Billing System
A few days back, Google’s support page revealed that the search engine giant is updating Google Play’s Payments policy. The introduction of new policies is in response to the legal actions against the company in India. One of the directions was to allow the developers to offer a third-party billing system to users during in-app purchases.
The app developers had to rely on Google’s billing system for in-app purchases. However, a service will be collected from users on the transaction if they opt to pay through the third-party billing system. But Google has revealed that the service fee will be limited to a 4 per cent rate. It indirectly tells us that the app developers will have to pay for service ranges which range between 6 to 26 per cent. The changes would be applicable for both in-app purchases and subscriptions.
The rate of service charges would depend on the type of app or service and the annual revenue it generates through Google Play. Earlier, Google collected a service fee of 10-30 per cent. Google explains that the service fees charged by Google Play have always been for the value Android and Google Play provide. The fees were also for all the developer services offered, which included app distribution & discovery, developer tools, analytics, training, and more.
The company has also revealed about the intermediary steps that developers must undertake to offer an alternate billing system until it builds APIs. Once it builds APIs in later 2023, it will streamline third-party billion integration. The developers interested in providing an alternate billing system must switch to the automated APIs once they go live. A month ago, the brand revealed that it would allow third-party billing for apps to comply with CCI’s instructions. The search engine giant is still challenging the fine imposed by CCI.
The new alternate billing system is an extension of the pilot programme available in India, Australia, Indonesia, Japan, and the European Economic Area. Google had offered the developers in the programme to opt for a different billing system with a reduced service fee range. However, for unknown reasons, the programme was not available for game developers. Google will do anything to comply with CCI’s directive because India is one of the vast markets for Google Play regarding app downloads and users.
The company was subjected to critics from Indian developers regarding its previous policies which requires mandatory integration of the Play billing systems. However, the antitrust order from CCI in November 2022 led to the pausing of enforcement of its in-app billing system in India. CCI asked Google not to restrict app developers from using third-party billing or payment processing services.
Google was fined another Rs 936.44 crore for exploiting its position with the Play Store policies. The company failed to obtain relief after it approached National Company Law Appellate Tribunal. Later, the company moved to honourable Supreme Court to reconsider the tribunal’s decision. Even though the court refused to interfere in the case, it had directed NCLAT to resolve the matter by March 31, 2023.
