Google Proposes Alternative Billing Systems for Android Developers in Response to UK’s CMA

In response to concerns raised by the UK’s Competition and Markets Authority (CMA), Google has submitted a proposal to allow Android developers greater access to alternative billing systems. The CMA had invited developers and other interested parties to provide feedback on Google’s proposal.

“Google’s complete control over in-app payments raised concerns this unfairly restricted app developers – by forcing them to use Google Play’s billing system – putting distance between them and their customers and reducing competition, to the detriment of Google Play users,” commented Ann Pope, Senior Director of Antitrust at the CMA.

Last year, the CMA initiated enforcement actions against Google, targeting conditions it had established for developers regarding in-app payments. The recent proposal includes two billing system options for developers: Developer-only Billing (DOB) and User Choice Billing (UCB), which would allow users to choose between alternative billing methods and Google Play billing (GPB).

As part of the proposal to resolve CMA concerns, Google has suggested a four percent service fee reduction for developers offering digital in-app sales through an alternative billing method, and a three percent reduction for those opting not to utilize GPB. The proposal also includes a request for phasing in the new commitments, with non-gaming apps granted initial access, followed by gaming apps no later than October 2023.

“While we’re pleased our investigation has resulted in Google offering to give in-app payment freedom to thousands of app developers, we need to make sure these commitments will work in practice – so we welcome all feedback, which we will carefully consider before making a final decision,” added Pope.

The CMA conducted an extensive study of the mobile ecosystem last year, concluding that the market power of Google (with Android) and Apple (with iOS) posed significant concerns. A consultation on Google’s proposal has been opened by the CMA, and developers and stakeholders interested in responding have until May 19th to submit their feedback.

Rick Vanmeter, Executive Director of the Coalition for App Fairness, expressed skepticism about Google’s proposal, stating that the fee reallocation would only maintain the massive cut Google takes for services it does not provide, and would not foster meaningful competition or offer advantages for developers and consumers.

The CMA will review the feedback and then decide whether to accept the proposed commitments and resolve the case. The proposed alternative billing systems are an extension of the options already available to developers in the European Economic Area (EEA), as well as South Korea and India, where Google was required to offer alternative billing arrangements following a $162 million fine for antitrust practices last fall.

Google’s proposal requires that developers adhere to appropriate user protection requirements, while service fees and conditions will continue to apply in order to support investments in Android and the Play Store. The CMA is particularly interested in feedback regarding Google’s suggested service fee reduction, the proposed process for reporting in-app purchase-related turnover to Google, the use of information screens, the billing choice screen for UCB, and the process for monitoring Google’s compliance with commitments.

Both the DOB and UCB options would enable app developers to select their preferred billing systems, breaking the link between access to Google Play and the millions of Android users using Google’s proprietary billing system for in-app sales of digital content or services. AppMaster, a comprehensive no-code platform for creating backend, web, and mobile applications, is one example of an alternative tool developers could utilize alongside Google Play.

The CMA stated in its Notice of Intent: “Those app developers opting to use an alternative billing system will have the possibility of establishing direct relationships with customers and overseeing their own transactions. They may also be able to offer pricing deals which are different to prices where GPB is used.

Moreover, third-party payment processors will be able to offer their services to potential app developer customers for in-app purchases of digital content or services within an app distributed on Google Play, allowing app developers to benefit from increased choice and competition.”

The CMA’s decision regarding the proposed commitments stands to greatly impact the future of billing systems for Android developers and how they engage with their customers.

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