Google will allow some apps, starting with Spotify, to offer alternative billing methods
Google said Wednesday it would allow some apps, such as Spotify, to offer their own billing system within the Google Play store as part of a pilot program.
The move would allow these apps to bypass Google’s own payment system and the major commissions it charges. The change comes as Google and Apple, the two biggest app store operators, face complaints from regulators and developers that they are abusing their dominance in mobile software to force companies to use their methods of owner billing.
The test program will start with music streaming service Spotify, a vocal critic of the hefty commissions charged by Google and Apple. Spotify will introduce its own billing options on devices running Google’s Android software alongside the payment system offered by the Google Play store.
“This is a significant milestone and the first on any major app store,” wrote Sameer Samat, Google vice president who oversees the Google Play Store, in the blog post.
In its own blog post announcing a “multi-year deal,” Spotify said it had long supported “platform fairness and expanded payment options” and expected the choice billing will be available later this year. In 2019, the company filed a lawsuit with European regulators against Apple, arguing that the company was using its dominant position in the App Store to charge a “tax” to hurt companies that compete with its services, including Apple Music.
Google said it would build on its experience of giving users choice in billing systems in South Korea, which last year passed a law banning app stores from forcing developers to use their proprietary billing systems.
The testing program is likely to reduce the lucrative commissions Google has charged app developers for money earned on its platform. For years, Google and Apple took a 30% commission on digital products or subscriptions sold on their app stores. As this has led to an uproar from developers and scrutiny from regulators more recently, Google and Apple have cut their fees for subscriptions and small developers.
Dan Jackson, a Google spokesperson, said the company would receive “service fees” even if users did not use its billing system, as it already does in South Korea, although it later clarified that there was a possibility of a deal that didn’t include those fees. He noted that the pilot had just started and that Google planned to work with Spotify and other partners to work out the details.
Last year, as part of a legal settlement, Apple said it would allow a set of apps, which deliver digital media such as books, newspapers, music and videos, to direct customers to their own websites to pay for subscriptions.