Google Alphabet Inc. will start letting some apps bill users directly as an alternative to paying through Google. This effort comes amid growing monopoly concerns over app store fees.
The new system that Google has framed as an experiment started with streaming giant Spotify Technology SA. If the user chooses to pay Spotify directly instead of using Google's billing system, Spotify does not need to pass the entire 15% fee to Google,
“This is an important milestone and a first on any major app store — whether on mobile, desktop or game consoles,” said Google vice president Sameer Samat, quoted by Bloomberg, Thursday (24/3).
As is known, Google and Apple Inc. have faced pressure from lawsuits for requiring app makers to use their payment systems. Google takes a 30% commission on most app store purchases and subscriptions, but has lowered costs in recent years to 15% for media providers like Spotify.
Spotify is one of several companies complaining about the inability to use their own billing system in the mobile app store.
In July, three dozen countries sued Google, alleging that the company was illegally abusing its power over the app industry via the Google Play Store on mobile devices. The state called the 30% commission "wasteful" in the complaint.
Separately, Congress is pushing to regulate app stores through the Open App Market Act, which has the best chance of becoming legislation among bills aimed at curbing big tech.
In South Korea, Google was forced to provide an alternative billing system after regulatory action. In that market, Google says it has reduced app creator costs by 4%.
This move is unlikely to spur Apple to make similar changes. The iPhone maker last year said it would allow media apps, including music apps like Spotify, to connect users to the web to complete payments, which would avoid Apple's 15% to 30% fees entirely.
By 2021, consumers will spend $133 billion on apps, two-thirds of which are on Apple's platforms, according to Sensor Tower. Over the life of the app, Spotify has been installed nearly 1 billion times from the Google Play Store, Sensor Tower added.
Subscribe Daily Post or Follow Google News to update information quickly, Thank you..!!