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Report: Google To Force Apps To Pay Commission

Google Play

Google plans to take the gloves off.

The technology giant is expected to put an end to apps that have avoided Google Play Store rules on in-app purchase billing, Bloomberg reported.

Sources told the news outlet that the crackdown could come as early as next week in updated guidelines that will give app developers time to comply with the rules. Google will simply clarify long held rules for most apps that use its billing service for in-app content downloads, subscriptions and game upgrades and subscriptions, the sources told Bloomberg. It provides the company a 30 percent cut of purchases inside of apps on Android.

While the requirement has been in place for years, Spotify Technology SA, Match Group Inc., Netflix Inc. and Epic Games Inc., have managed to avoid the commission. For example, the news service reported rather than use their Google Play app store account, Netflix, Match Group and Spotify apps prompt consumers to pay with a credit card, bypassing Google’s fee.

Fortnite game maker Epic Games recently began letting players buy in-game upgrades for its popular video game by paying Epic directly. Apple and Google reacted by removing Fortnite from their app stores. Since then, Epic has filed suit against both companies.

“As an open platform, Android allows multiple app stores. In fact, most Android devices come with at least two stores right out of the box, and users can install others,” Google told Bloomberg in a statement. “For developers who choose to distribute their apps on Google Play, our policy has always required them to use Play’s billing system if they offer in-app purchases of digital goods. We are always working with our partners to clarify these policies and ensure they are applied equitably and reasonably.”

Apple has taken a very public stance in court against Epic. The battle began in August when Epic tweeted that Apple planned to terminate its account on the App Store effective Aug. 28. The feud commenced when the game maker unveiled a payment platform crafted to bypass the App Store’s payment system and its 30 percent commission.

Epic filed suit alleging Apple “retaliation” and claiming its practices restrict competition. Epic asked the Northern California District court to stop Apple from blocking the game.

“Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100 percent monopoly over the iOS In-App Payment Processing Market,” Epic Games wrote in the legal filing.

In response, Apple filed a counter lawsuit against Epic accusing the software developer of greed and deceit in the fight over the iPhone maker’s App store. Apple asked the judge to award punitive damages and end Epic’s alleged unfair business practices.

“Epic’s lawsuit is nothing more than a basic disagreement over money,” Apple said in its filing. “Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion-dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store.”

A federal judge is expected to hear the case later this month.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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