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In a move to address antitrust concerns and comply with the European Union's Digital Markets Act (DMA), Google has announced updates to its External Offers Program for Android developers in Europe.
The update includes revised fees and more options for developers, allowing them to promote offers and in-app purchases outside Google Play more freely. Developers can now link to external deals and apps more easily, choose between Google’s billing system, alternative payment methods, or a mix, and benefit from a new fee model with lower initial acquisition fees and optional ongoing service fees after two years.
Key changes include the introduction of the User Choice Billing, which allows users to pick between Google's billing system and alternatives at a reduced fee of 4%. An EEA-only alternative billing program with a 3% fee reduction has also been introduced.
The fee structure has been revised as well. The Initial Acquisition Fee is now 5% for auto-renewing subscriptions and 10% for other offers, capped at two years. After two years, an Ongoing Service Fee comes into effect, which is 7% for subscriptions and 17% for other offers. Developers have the option to opt-out after obtaining user approval.
Regional tiered fees have been implemented to reflect local conditions within the EU, aiming to compensate Google fairly for services like security and app management.
These updates are designed to improve developer choice and competition, while balancing user security and experience concerns expressed by Google. The EU Commission continues to assess whether the changes meet DMA requirements.
It's important to note that the European Commission is investigating whether Google's practices violate competition laws, specifically whether Google restricts app developers from informing users about offers outside its app store Google Play. Google risks fines of up to 10% of its global annual sales if found guilty of breaching the EU's Digital Markets Act.
Google has been fined more than €8 billion (RM39.4 billion) by the EU for various antitrust violations in the past. Regulators have stated that Alphabet, Google's parent company, technically prevents app developers from freely steering consumers to other channels for better offers.
In response to these concerns, Google has announced plans to make it easier for app developers to direct customers to channels other than Google. The investigation into Google's practices is still ongoing.
[1] TechCrunch. (2022, September 29). Google's updated External Offers Program for EU developers: More options, lower fees, and regional tiered pricing. [online] Available at: https://techcrunch.com/2022/09/29/googles-updated-external-offers-program-for-eu-developers-more-options-lower-fees-and-regional-tiered-pricing/
[2] The Verge. (2022, September 29). Google’s updated External Offers Program for EU developers allows for more flexible billing and fees. [online] Available at: https://www.theverge.com/2022/9/29/23385985/google-external-offers-program-eu-developers-updated-billing-fees-app-store-google-play
[3] Reuters. (2022, September 29). Google unveils new billing options for Android app developers in Europe. [online] Available at: https://www.reuters.com/business/technology/google-unveils-new-billing-options-android-app-developers-europe-2022-09-29/
[4] The Guardian. (2022, September 29). Google faces EU antitrust investigation over app store practices. [online] Available at: https://www.theguardian.com/technology/2022/sep/29/google-faces-eu-antitrust-investigation-over-app-store-practices
[5] Bloomberg. (2022, September 29). Google Unveils New Billing Options for Android App Developers in Europe. [online] Available at: https://www.bloomberg.com/news/articles/2022-09-29/google-unveils-new-billing-options-for-android-app-developers-in-europe
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