Google To Cut Play Store Fees, Allow Developers To Use Rival Payment Systems

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As part of its efforts to comply with the new EU Digital Markets Act, Google will enable billing choices for consumers within the European Economic Area.

The alphabet in an effort to comply with new EU tech regulations, Google said it will reduce fees for non-gaming app developers on its Google Play App Store who switch to competing payment methods starting Tuesday to 12 percent from 15 percent.The most prominent internet search engine in the world said that the charge reduction only applies to users in Europe and that gaming applications would ultimately be allowed to accept other payment methods as well.The action highlights a shift in Google’s strategy from last year, where it now prefers to yield to pressure from regulators and antitrust authorities with offers of concessions rather than get involved in protracted and unproductive battles.

The Digital Markets Act (DMA), a set of EU regulations, which will go into effect the following year, mandates that internet giants permit app developers to utilise competing payment processors for app sales or face fines of up to 10% of their global turnover.

The two companies most impacted by this restriction are Apple and Google.

According to Estelle Werth, Google’s head of EU government affairs and public policy, “as part of our efforts to comply with these new rules, we are launching a new project to support billing alternatives for EEA (European Economic Area) consumers”.

This would allow non-gaming app developers to give EEA users an option to Google Play’s billing structure when they are paying for digital goods and services, the spokesperson said.

The 27 EU member states, along with Liechtenstein, Iceland, and Norway, make up the EEA.

According to Werth, “the service cost the developer pays will be lowered by 3 percent when a consumer adopts an alternative billing method”.

Since 99 percent of developers are now eligible for service fees of 15% or less, those developers would pay service fees of 12% or less based on transactions through alternative billing for EEA customers gained through the Play platform.

The fees that Apple and Google demand in their mobile app stores, according to critics, are too exorbitant and cost developers billions of dollars annually, underscoring the two corporations’ monopoly strength.

EU antitrust sanctions against Google for engaging in anti-competitive behaviour with regard to its price comparison service, Android mobile operating system, and advertising service total more than EUR 8 billion (approximately Rs 65,500 crore) during the past ten years.

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