Home Correction app Google is loosening its grip on in-app payments, starting with Spotify

Google is loosening its grip on in-app payments, starting with Spotify

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What is happening

Google and Spotify have struck a deal that lets subscribers use the streaming service’s payment system, a major break in how app stores work.

why is it important

If Google expands the program, developers and users could have more control over how payments in mobile apps are made, which could make transactions cheaper.

Google is opening up to third-party app payments on the Play Store.

Xiomara Blanco/CNET

google reached historic agreement it will leave Spotify offers its own in-app payment option alongside Google’s Android billing system, a move the search giant has resisted for years.

While the change may seem minor, it could turn out to be a major crack in the fortresses that Google – and Apple – have built around their massive mobile app economies since they laid the groundwork for them more ago. ten years old.

The effect on consumers like you may be very small at first: a segment of Android users who wish to subscribe to Spotify will be able to register more easily in its application and have a new choice of payment method. But the change, if adopted more widely, wouldn’t just give you more control over how you pay for transactions in mobile apps. It could also disrupt the dynamics that in some cases made your in-app purchases more expensive and in other cases removed the option of an in-app purchase altogether.

“This is an important milestone and the first on any major app store, whether on mobile, desktop or game consoles,” said Sameer Samat, vice president of management. of Google’s products, in a blog post aimed at developers. The option to use third-party payment will be rolled out more widely in the future, he said.

Spotify, in its own blog post, said it will be able to offer its own billing option alongside Android’s in its mobile app, adding that it will also be able to “communicate freely” about discounts and in-app promotions. Previously, Spotify did not allow listeners to subscribe to its premium subscription at all in its Android app; its Apple mobile app also doesn’t offer a subscription. Spotify had pulled out of in-app payments entirely due to its objections to fees and restrictions set by Google and Apple.

Google had already started allowing app developers to offer alternative payment systems in South Korea after a law was passed. Now it is growing all over the world. For security reasons, Google said it starts with Spotify, which is the world’s largest music streaming service with over 400 million listeners, and other trusted partners.

The battles over in-app payments

The move comes after years of resistance to third-party payment on Google Play and represents a major change in the way platform owners run their software marketplaces. Google, together with Apple, controlled payment systems to ensure a reduction, usually between 15% and 30%, depending on a few factors. The common practice of forcing all mobile transactions through Google or Apple’s payment systems reduces developer revenue. App stores like Google Play have been subject to alleged monopolistic practices by legislators and regulatorsboth in the United States and abroad.

In a major case, Google has battled Epic Games, the creator of the hit battle royal game Fortnite, over payments outside of the Play Store. As soon as Epic Games started allowing players to purchase in-game purchases outside of the Play Store, Google pulled the popular title from its marketplace. As of press time, Fortnite is still not available on the Play Store, but can be downloaded and installed externally, similar to how a program is installed on a computer.

In October last year, Google filed a counterclaim stating that Epic Games owed reparation to Google for allowing users to download Fortnite through the Play Store, but instead use Epic’s payment system. Google and Epic Games have agreed to a trial in early 2023.

Google’s payment policy change follows last year’s verdict in a lawsuit between Epic and Apple. The decision required Apple to allow app developers to notify consumers that they could exit the App Store to make payments for items or subscriptions purchased in apps. However, the developers can’t provide button connecting customers to another payment system.

Google’s program with Spotify will give some Android users more control over how they pay for the music streaming service. While the exact terms of the deal aren’t known, it could allow Spotify to promote certain deals or pass savings on to customers now that Google is offering alternative payment methods.

Spotify has frequently criticized Apple for abusing the power of its App Store, including billing system restrictions. Spotify said Apple retaliated when it tried to circumvent Apple’s payment system by rejecting updates to its mobile apps.

Apple has dismissed accusations that its App Store is anti-competitive, though the EU found that the company’s in-app payment practices violate competition law. Apple did not immediately respond to a request for comment for this story.

Google allows some alternative payment platforms to be used with Android. The Samsung Galaxy Store and the Amazon Appstore are two prominent examples in the United States. The Huawei App Market Store and Tencent My App Store are examples in China.

Corrigendum, March 24: An earlier version of this article misrepresented the start of the pilot program in South Korea. Third-party payments were already available in the country.