According to the latest report, Google has recently decided to allow Spotify to use its own in-app payment system. “Financial Times,” wrote that, in simple terms, app stores dominate the mobile app ecosystem, and the days of charging high commissions are coming to an end, but in fact, app developers shouldn’t be too happy.
Join tip3x on Telegram
Moreover, large developers such as Epic Games and Match have long expressed dissatisfaction with the cut that the app store takes through its in-app payment system. Antitrust criticism directed at companies such as Google and Apple also suggests that many regulators share that sentiment.
Moreover, Google Play and Apple’s App Store typically take a 30% cut of a user’s first-year paid subscription, which is then reduced to 15%. App store providers argue this is fair, as they bring millions of users to apps and provide ongoing services such as information security. However, they do not provide a convincing explanation of the fees.
Google’s new plan means that Spotify users on Android devices can use other paid systems. The Financial Times pointed out that the key question is how much Spotify might pay Google for this. App store providers seem to want to make up for it by charging additional fees when developers bypass their payment systems.
In the Netherlands, for example, Apple proposes that the platform charge a 27% cut when users make in-app purchases through other payment methods. Google’s move puts pressure on Apple and could force it to further ease restrictions on third-party payment systems.
Apple has previously adjusted its fees, reducing its commission for smaller developers to 15%. Developers, on the other hand, would like to see a further reduction in the percentage of the commission. Currently, the standard for the Microsoft App Store is 12%.
Furthermore, Google and Apple are unlikely to cut their fees to such a low level. Neither company has disclosed specific profit figures from app store fees. But investigations in state antitrust lawsuits found that Google Play accounted for a fifth of parent company Alphabet’s operating profits in 2019. Therefore, Google will not easily give up this part of the profit.
App stores offering other payment options may please regulators, but developers may find they have to pay app stores high fees anyway. The way app stores charge is constantly changing but never eliminated.
