Google will allow app developers to offer an alternate billing system for in-app purchases within India from April 26, 2023, as it begins to comply with the Competition Commission of India (CCI)'s recent antitrust directives.
On a support page on February 22, Google said it is updating Google Play’s Payments policy in response to the "recent regulatory developments in India", which will be effective from April 26.
As part of this move, developers will be allowed to offer an additional billing system to users in addition to Google Play when purchasing in-app digital content. If a user pays through the alternative billing system, the transaction will still be subjected to a service fee, but at a 4 percent rate reduction.
This effectively means that developers will have to shell out a service fee ranging from 6-26 percent for in-app purchases and subscriptions depending on the type of app/service and the annual revenue it generates on Google Play, as compared to the regular 10-30 percent service fee.
"Google Play’s service fee has never been simply a fee for payment processing. It reflects the value provided by Android and Google Play, and all of the developer services we offer, including app distribution and discovery, the commerce platform, developer tools, analytics, training, and more", the company stated on the support page.
Streamlined API in 2023
Google has also outlined 'interim steps' developers need to take to offer an alternative billing system until it "builds APIs that will streamline integration in 2023".
Developers that choose to implement an alternative billing system will be required to switch to the company's automated APIs once they become available later this year, it noted.
Google had first announced the move to allow third-party billing for all apps on January 26 as part of sweeping changes it will be making to its Android and Play business to comply with CCI's directives, even as the tech giant continues to challenge the antitrust order.
This was an extension of a pilot programme that the Android maker was running in India and four other markets such as Australia, Indonesia, Japan, and the European Economic Area, wherein participating developers could offer an additional billing system to users in addition to Google Play for a reduced service fee ranging. This pilot however had excluded game developers.
India is among the biggest markets for Google Play in terms of app downloads and users. The country is also emerging as a key monetisation opportunity for Google Play, driven by the rising adoption of digital transactions in the country.
That said, Google has faced intense backlash from Indian developers over its app policies in recent years, particularly after the company's announcement in October 2020 that it will begin enforcing a mandatory integration of its Play billing system across the world.
In November 2022, Google said it will be pausing the enforcement of its in-app billing system in India following the CCI's antitrust order on Play billing. The policy has already been made mandatory for in-app digital content purchases for users outside of India.
Read: Google says CCI rulings will harm users, increase smartphone prices
Google vs CCI
In October 2022, CCI had directed the tech giant to modify its conduct towards smartphone makers through a range of corrective measures besides imposing a penalty of Rs 1,338 crore for exploiting its dominant position in Android.
Through a separate order in the same month, CCI also directed Google not to restrict app developers from using any third-party billing or payment processing services to purchase apps or for in-app billing on Google Play besides a range of corrective measures to modify the company's app payment policies.
It also fined Google Rs 936.44 crore for abusing its dominant position with regard to its Play Store policies.
Google moved the NCLAT in January, but failed to get immediate relief. The company then approached the Supreme Court against the tribunal's decision. While the apex judicial body refused to intervene in the case, it asked the NCLAT to make a decision by March 31, 2023. The tribunal is currently hearing arguments on the matter.
Read: Google tweaks Android licensing terms in India, allows third-party billing for all apps
Internet firms oppose Google's moves
Some local and international companies have alleged that Google is not fully complying with CCI's order and the measures they have announced are not enough.
Rohan Verma, CEO of digital mapping firm MapmyIndia, had earlier said these measures are "piecemeal, and being done in the way Google wants", stating that the outcome of these steps will not lead to "on-ground impact of enhancing competition"
Earlier this month, Fortnite maker Epic Games had challenged Google in NCLAT for not complying with a few portions of CCI's order. In its petition, Epic Games had alleged that Google is not permitting the gaming firm's app store on its app marketplace Google Play.
"We are seeking to join Indian developers in Court to support the CCI’s order that requires Google to allow competing third party app stores on the Google Play Store” Bakari Middleton, Director of Global Public Policy at Epic Games had said in a statement to Moneycontrol on February 14.
"Consumers should be able to choose how they access apps on their mobile devices and developers should be able to compete fairly in the mobile app ecosystem" Middleton said.
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