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Google Play’s billing crackdown arrives soon, but Spotify has a special deal


Let's see, you landed on my "Google Ads" space, and with three houses... that will be $1,400.
Enlarge / Let’s see, you landed on my “Google Ads” space, and with three houses… that will be $1,400.

Ron Amadeo / Hasbro

Google is once again not putting its foot down on big developers who refuse to use its in-app billing system. The Play Store always required developers to use Google Play’s in-app billing system, but many big developers like Netflix and Spotify simply ignored the rule and did their own billing anyway. Google never punished these companies, but it did announce a deadline to switch to Google Play billing by September 2021—and then allowed extensions to March 31, 2022. This is the second time the deadline has gotten close to arriving, and we’re again seeing cracks in Google’s attempts to enforce its rules. The latest news is that Google is expanding third-party billing in the Play Store, at least for one huge streaming company.

Google’s latest blog post said the company is now launching a “pilot” program called “user choice billing.” Google said the program will “allow a small number of participating developers to offer an additional billing option next to Google Play’s billing system.” The only announced participating developer is Spotify, one of the two highest-profile companies to continuously ignore Google’s rules. Google said, “This pilot will help us to increase our understanding of whether and how user choice billing works for users in different countries and for developers of different sizes and categories.”

In South Korea, you can pick a payment processor from inside Google Play.
Enlarge / In South Korea, you can pick a payment processor from inside Google Play.

Google

Google says the program is based on the work it was forced to do in South Korea, where a law that passed in 2021 requires app stores to allow third-party payments. In Korea, when you press the checkout button in Google Play, a card pops up asking you which payment processor you want to use. Previously, apps would kick users out to an external webpage (sometimes a webpage embedded right in the app, making for a seamless checkout experience), but now, you’ll be able to do this through Google Play.

If you’re a developer, running your payments through a third-party provider won’t necessarily result in you keeping a higher share of your sales. In Korea, when you pick a third-party billing option in Google Play, you are still charged a fee by Google Play. The usual 15–30 percent fee is lowered by 4 percent, or about the cost of a credit card transaction fee. When Apple was forced to allow third-party billing, it also lowered the App Store fee by just 3 percent. Developers aren’t actually saving money here.

The goal of external billing was to avoid these fees, but in Google’s Korea example, developers will still lose the same amount of money; they’ll just spend it in different places. Google hasn’t said what kind of deal Spotify is getting, but Spotify seems happy about the partnership. “We’re excited to be partnering with Google to explore this approach to payment choice,” the company said. That’s not the sort of thing a company would say in response to its Play Store fees suddenly going from 0 percent to 26 percent. Perhaps Spotify’s payment deal also comes with custom (and very low) payment fees.

We have to wonder what will happen with Google Play’s other big billing delinquent, Netflix. Place your bets on what will happen next week when the March 31 deadline for Google Play billing supposedly kicks in. Will Netflix switch to Google Play Billing? Will Netflix refuse? And does Google have the guts to ban Netflix from the Play Store? Apps that don’t comply with the policy will at first be unable to ship app updates, and on June 1, they’ll be booted from the Play Store.



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