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Google Will Allow Some Apps, Starting With Spotify, to Offer Alternate Billing Methods – The New York Times

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The test program is likely to whittle away at the lucrative commissions that Google has charged app developers for money made on its platform.

Google said on Wednesday that it would allow some apps, such as Spotify, to offer their own billing system within the Google Play store as part of a pilot program.
The move would allow those apps to bypass Google’s own payment system and the main commissions that it charges. The change comes as Google and Apple, the two biggest app store operators, face complaints from regulators and developers that they are abusing their dominance in mobile software to force companies to use their proprietary billing methods.
The test program will start with music streaming service Spotify, a vocal critic of the hefty commissions charged by Google and Apple. Spotify will present its own billing options on devices running Google’s Android software alongside the payment system offered by the Google Play store.
“This is a significant milestone and the first on any major app store,” Sameer Samat, a Google vice president who oversees the Google Play store, wrote in the blog post.
In its own blog post announcing a “multiyear agreement,” Spotify said it had long supported “platform fairness and expanded payment options” and that it expected the billing choice to become available later this year. In 2019, the company filed a complaint with European regulators against Apple, arguing that the company used its dominance in the app store to charge a “tax” to hurt companies that compete against its services, including Apple Music.
Google said it would build on its experience of offering users choice in billing systems in South Korea, which passed a law last year banning app stores from forcing developers to use their proprietary billing systems.
The test program is likely to whittle away at the lucrative commissions that Google has charged app developers for money made on its platform. For years, Google and Apple took a 30 percent commission for digital goods or subscriptions sold on their app stores. As that has led more recently to an uproar from developers and scrutiny from regulators, Google and Apple have lowered their commissions for subscriptions and smaller developers.
Dan Jackson, a Google spokesman, said the company would receive a “service fee” even if users do not use its billing system, as it already does in South Korea, though he later clarified that there was a possibility of a deal that did not include such fees. He noted that the pilot had just begun and that Google planned to work with Spotify and other partners to hash out the specifics.
Last year, as part of a legal settlement, Apple said it would allow a set of apps, which provide digital media like books, newspapers, music and video, to steer customers to their own websites to pay for subscriptions.
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