Google justifies new in-app billing policy as criticism mounts
Google's new payments policy has invited the ire of app developers and start-ups. The company has now come out in defense of the policy that went into effect on April 26. According to the company, the new policy complies with the Competition Commission of India's (CCI) October 2022 order. Let's look at Google's new in-app billing policy and the criticism leveled against it.
Why does this story matter?
India is one of Google's biggest markets. However, the tech titan suffered multiple setbacks in the past few months courtesy of India's competition watchdog. In October last year, the CCI imposed a penalty of Rs. 936.44 crore on Google due to its anti-competitive Play Store policies. The watchdog also directed the company to allow third-party billing systems.
Google now provides three billing options
Google Play's new billing policy offers three payment options: Google Play's billing system, an alternative billing system alongside Google Play's, and payment on a consumption-only basis without a service fee. The company usually charges a 15-30% service fee. It said the vast majority of developers in India pay 15% or less. People who use an alternative billing system get a further 4% reduction.
Less than 60 developers could pay over 15% service fee
In a blog post, Google said the service fee it collects funds a part of its investments in India's app ecosystem. The company described its common 15% or less rate in India as the "lowest" among major app stores. Per Google's estimates, less than 60 out of 200,000 developers in India "could pay a service fee of above 15%."
Developers say the new policy is the same as old
App developers and start-ups have criticized Google's new billing policy as old wine in a new bottle. Even if developers are using an alternative billing system, they still have to pay Google an 11-26% service fee. They say the service tax on those who don't use Google's billing system is anti-competitive and against CCI's October order.
App developers and start-ups have approached court
Tinder-owner Match Group and Alliance of Digital Foundation (ADIF) approached the Delhi High Court to suspend Google's new in-app billing fee system until the CCI has a chance to look into it. Despite this, Google has decided to push forward. The CCI has begun inquiry but its lack of quorum provided the tech giant an opportunity to move ahead.
