Google Allows Alternative Payment System Following Antitrust Intervention

Following an antitrust intervention by the United Kingdom’s Competition and Markets Authority (CMA), Google has decided to allow developers offering apps through its UK Play mobile app store to have the choice of using alternative payment processors for in-app transactions, rather than being locked to its own billing system (GPB).

The developers and other interested parties have been invited to respond by May 19 to the CMA’s consultation on Google‘s plan. The CMA says it intends to accept the proposal. It will take a call on whether to accept the commitments and end the case.

Previously, last summer, the regulator ended a year-long study of the mobile ecosystem that identified great concerns with the market power of the duopoly of Google with Android and Apple with IOS.

At that time, it indicated it was taking enforcement action against Google with respect to its app store payment practices along with starting several other extensive investigations into other elements of the two tech giants’ business. Here, the CMA’s focus is on the conditions it sets for developers for in-app payments. Therefore, Google’s proposal targets to settle those concerns.

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In a blog post detailing Google’s offer, legal director, Oliver Bethell, writes:

Google’s Legal Director, Olver Bethell, in a blog post, wrote, “Under the commitments, developers will be able to add an alternative in-app billing system, alongside Google Play’s billing system, for their mobile and tablet users in the U.K. At checkout, users will be able to choose which billing system to use. These options will be presented in a neutral manner allowing users to make an informed and engaged choice.”

In the post, the company also noted that its UK proposal would extend the option of an alternative billing system that it already offers in the European Economic Area (EEA). Google has faced a number of antitrust enforcements over the past years at EEA and in other parts of the world such as South Korea. In 2021, lawmakers intervened to force Google’s hand on billing in South Korea.

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Now, Google is all set to offer the same alternative billing in India too. This comes after being slapped with a $162M fine for antitrust practices last fall.

For its UK offer, Google is recommending a 4% reduction in what it calls the per-transaction “service fee” it charges developers for in-app digital sales, also known as it’s cut/commission (or the app store tax, as some criticize such fees). This reduction would apply when a developer gives users the option of GPB but the user chooses alternative billing. However, if developers choose not to offer Google’s own payment processing system the proposed stick is a slightly lower reduction in the tech giant’s cut. The reduced cut would be 3%.

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“For both options, developers are still required to meet appropriate user protection requirements, and service fees and conditions will continue to apply in order to support our investments in Android and Play,” Google adds.

The CMA will determine whether to accept the plan, and that decision may be influenced by the type of comments it receives. Whether Google gets its way will depend on the CMA’s decision.

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