The recent passage of the Digital Markets Act (DMA), a piece of antitrust legislation in the EU aimed at reigning in the power of tech giants and leveling up the field so that startups can compete, is forcing some very important changes in the way that Google and the Google Play Store do business in the European Economic Area (EEA), while still keeping app purchases safe and the integrity of its mobile store intact.
In a blog post today, Google talked about what it plans to do to stay compliant with the new rules, which will now support billing alternatives to Google Play billing for app and in-app purchases. However, this will come with some caveats as service fees and conditions will continue to apply, albeit at a lower percentage:
Developers of non-gaming apps can offer their users in the EEA an alternative to Google Play’s billing system when they are paying for digital content and services.
When a consumer uses an alternative billing system, the service fee the developer pays will be reduced by 3%. Since 99% of developers currently qualify for a service fee of 15% or less, those developers would pay a service fee of 12% or lower based on transactions through alternative billing for EEA users acquired through the Play platform.
Additionally, Google states that starting today, it will not remove or reject updates of non-gaming apps that include alternative billing for EEA users. However, it stresses that Google Play’s billing will remain a requirement for apps and games distributed to users outside the EEA and games within the EEA. Furthermore, Google expects to have billing alternatives in place for gaming apps in the EEA before the DMA’s effective date, which is October 2022.
Google’s in-app payment policy has been a subject of much controversy, prompting several lawsuits in the U.S., such as the ongoing battle with Match Group, Epic Games, and others. Now that the EU has taken such a firm stand towards breaking up Big Tech and encouraging competition, I believe it’s only a matter of time before we see something similar happening in the U.S. and other locations. In fact, in the U.S., legislation is already on the Senate legislative calendar that aims to limit big tech companies’ app stores. The question remains whether these measures will in fact foster more competition and level the playing field for tech startups.