The Competition and Markets Authority (CMA) says it is consulting on commitments offered by Google which would give app developers the freedom to break away from Google Play’s billing system and use alternatives to process in-app payments.
Google store to offer payment choices
Google Play accounts for over 90% of native app downloads on Android devices and restrictions placed on app developers currently require them to use Google Play’s own billing system for in-app transactions involving digital content.
Google Play accounted for 30-40% of all net revenue generated by UK consumers using in-app payment systems. Average customer billings on apps per active Android mobile device was £0-25 in 2021. In 2021, Google Play’s average commission was between 25% and 30%.
Following the CMA’s market study into ‘mobile ecosystems’ and concerns raised that Google’s control over payment processing in Google Play is potentially leading to higher prices and reduced choice for Android users, a new investigation was launched into these in-app payment rules.
Under these new proposals app developers would be able to offer a different payment system of their choosing, known as ‘Developer-only Billing’ (DOB), or offer users a choice between an alternative payment system and Google Play’s billing system, known as ‘User Choice Billing’ (UCB).
Third party payment providers would have the ability to market their services to app developers for processing transactions involving digital content – enabling greater innovation and competition for Play in-app payment services and allowing app developers to have a more direct relationship with their customers.
By breaking the link between app developers’ access to Play and Google’s payment system, the commitments could allow Play users to access new special offers and in-app deals that are not permitted under current Google Play rules, allowing them to potentially save money and receive a different user experience while accessing paid-for digital content (such as streaming films and TV shows).
Before reaching a final decision, the CMA is consulting to determine whether these commitments will be appropriate, particularly for app developers and third-party payment providers.
“Google’s complete control over in-app payments raised concerns this unfairly restricted app developers – by forcing them to use Google Play’s billing system – putting distance between them and their customers and reducing competition, to the detriment of Google Play users,” comments Ann Pope, Senior Director of Antitrust at the CMA.
“While we’re pleased our investigation has resulted in Google offering to give in-app payment freedom to thousands of app developers, we need to make sure these commitments will work in practice – so we welcome all feedback, which we will carefully consider before making a final decision.”
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