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Alphabet Inc’s (NASDAQ: GOOGL) Google on Tuesday said the company will cut fees to 12%, from 15%, for non-gaming app developers if users choose rival payment systems for in-app purchases.
Google said the fee cut applies only to European consumers, while the freedom to use another payment system will eventually be expanded to gaming apps on the Google Play App Store.
The move comes amid pressure to comply with new EU tech rules, underscoring a change in Google’s strategy since last year, where the tech giant now prefers to bow to regulatory and antitrust pressure rather than embark on lengthy legal fights.
The EU rule, known as the Digital Markets Act (DMA), will come into force next year and will require tech giants like Apple Inc (NASDAQ: AAPL) and Google to allow app developers to use rival payment platforms for in-app purchases or risk fines of as much as 10% of their global turnover.
“As part of our efforts to comply with these new rules, we are announcing a new programme to support billing alternatives for EEA (European Economic Area ) users,” Estelle Werth, Google’s director for EU government affairs and public policy, said in a blogpost.
“This will mean developers of non-gaming apps can offer their users in the EEA an alternative to Google Play’s billing system when they are paying for digital content and services,” she said.
The EEA includes the 27 EU countries, Norway, Iceland and Liechtenstein.
“When a consumer uses an alternative billing system, the service fee the developer pays will be reduced by 3%,” Werth said.
“Since 99% of developers currently qualify for a service fee of 15% or less, those developers would pay a service fee of 12% or lower based on transactions through alternative billing for EEA users acquired through the Play platform.”
In the last decade, Google has been hit with more than 8 billion euros in several EU antitrust fines for anti-competitive practices related to its price comparison service, Android mobile operating system and advertising service.
Picture Credit: Ars Technica
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