Google is now providing additional information about the fees associated with its initiative to comply with Europe’s new Digital Markets Act (DMA). This new regulation aims to boost competition within the app store ecosystem.
Although Google previously mentioned certain ways in which it adhered to the DMA, such as allowing app sideloading, it had not yet disclosed the specific fees that would be imposed on developers. However, it has now promised to reveal further details today.
What Google Announced
Google has recently announced two fees associated with its External Offers program. This program, unveiled yesterday, enables Play Store developers to guide their users in the EEA beyond their app, offering promotions and deals.
By implementing these fees, Google is following in the footsteps of Apple, which had reduced its App Store commissions in the EU to comply with the DMA (Digital Markets Act). However, Apple introduced a new Core Technology Fee that requires developers to pay €0.50 for each initial annual installation beyond a threshold of 1 million for apps distributed outside the App Store.
Apple defended this fee by highlighting the comprehensive services it provides to developers, which go beyond payment processing. These services include app creation and discovery support, the development of APIs, frameworks, and tools, as well as efforts to combat fraud and more.
Google is opting for a similar approach, stating today that “Google Play’s service fee has never been solely a payment processing fee – it embodies the value provided by Android and Play and supports our ongoing investments across Android and Google Play, enabling the user and developer features that people rely on,” a blog post explains.
There will be two fees accompanying External Offers program transactions.
There is an initial acquisition fee of 10% for in-app purchases or 5% for subscriptions for two years. This fee represents the value that Play provided in facilitating the initial user acquisition through the Play Store.
There is also an ongoing service fee of 17% for in-app purchases or 7% for subscriptions. This fee reflects the broader value that Play provides users and developers, including ongoing services such as parental controls, security scanning, fraud prevention, and continuous app updates.
Google has provided additional information about the fee structure and addressed inquiries regarding the program. Additionally, the company has introduced two other programs that enable alternative billing systems for in-app purchases, with plans to make them accessible to all developers targeting EEA users.
Do Developers Have Any Options?
It is important to highlight that developers have the option to withdraw from the continuous services and associated fees, upon user consent, after two years. Users who have initially installed the app expect to benefit from services such as parental controls, security scanning, fraud prevention, and regular app updates, which is why their consent is necessary for opting out.
While Google permits developers to terminate the fee, the ongoing services will no longer be available. Despite this, developers will still be accountable for reporting transactions related to users who continue to access Play Store services.
Opinion
The European Union continues to lead the way in tech consumer protection and showcases what a functioning legislative body can do when it sets its petty differences aside and gets to work for the betterment of its people. The EU is leading by example, and hopefully, others will follow suit soon.
News Source: TechCrunch.