Press release

App developers on Google Play store offered payment choices following CMA probe

Google has said it will allow developers to use alternative payment options after CMA investigation into its control over Google Play in-app purchases.

From:
Competition and Markets Authority
Published
19 April 2023
Apps on a phone

Image credit: iStock

The Competition and Markets Authority (CMA) is consulting on commitments offered by Google which would give app developers the freedom to break away from Google Play’s billing system and use alternatives to process in-app payments.

Google Play accounts for over 90% of native app downloads on Android devices and restrictions placed on app developers currently require them to use Google Play’s own billing system for in-app transactions involving digital content. Following the CMA’s market study into ‘mobile ecosystems’ and concerns raised that Google’s control over payment processing in Google Play is potentially leading to higher prices and reduced choice for Android users, a new investigation was launched into these in-app payment rules.

Under these new proposals app developers would be able to offer a different payment system of their choosing, known as ‘Developer-only Billing’ (DOB), or offer users a choice between an alternative payment system and Google Play’s billing system, known as ‘User Choice Billing’ (UCB). Third party payment providers would have the ability to market their services to app developers for processing transactions involving digital content – enabling greater innovation and competition for Google Play in-app payment services and allowing app developers to have a more direct relationship with their customers.

By breaking the link between app developers’ access to Google Play and Google’s payment system, the commitments could allow Google Play users to access new special offers and in-app deals that are not permitted under current Google Play rules, allowing them to potentially save money and receive a different user experience while accessing paid-for digital content (such as streaming films and TV shows).

Before reaching a final decision, the CMA is consulting to determine whether these commitments will be appropriate, particularly for app developers and third-party payment providers. The deadline for any feedback is 17h00 Friday 19 May 2023.

Ann Pope, Senior Director of Antitrust at the CMA said:

Google’s complete control over in-app payments raised concerns this unfairly restricted app developers – by forcing them to use Google Play’s billing system – putting distance between them and their customers and reducing competition, to the detriment of Google Play users.

While we’re pleased our investigation has resulted in Google offering to give in-app payment freedom to thousands of app developers, we need to make sure these commitments will work in practice – so we welcome all feedback, which we will carefully consider before making a final decision.

More information on the CMA’s investigation and how to take part in the consultation can be found via the case page.

Notes to editors

  1. The CMA’s Mobile Ecosystems Market Study published a final report in 2022, which found:

    • Google Play accounted for 30-40% of all net revenue generated by UK consumers using in-app payment systems.
    • Average customer billings on apps per active Android mobile device was £0-25 in 2021.
    • In 2021, Google Play’s average commission was between 25% and 30%.

  2. The CMA opened its investigation into Google Play on 10 June 2022, having reasonable grounds to suspect that Google may have infringed the Chapter II prohibition of the Competition Act 1998 (CA98). The Chapter II prohibition of CA98 prohibits the abuse of a dominant position by one or more undertakings which may affect trade within the UK or part of it.

  3. Formal acceptance of the commitments would result in the CMA not continuing its investigation and not proceeding to a decision on whether the CA98 has been infringed. Any decision by the CMA to accept binding commitments will not include any statement as to whether or not Google’s conduct has infringed the CA98.

  4. The commitments package is for a five-year period once accepted unless varied, substituted or released as provided for in the commitments.

  5. Under DOB, Google would reduce its service fee (of up to 30% per in-app transaction) by at least 3 percentage points reflecting the fact that developers will incur costs in offering alternative payment processing and associated services. Under UCB, Google would reduce its service fee by at least 4 percentage points.

  6. This investigation uses the CMA’s enforcement powers under the Competition Act 1998. A Digital Markets Unit has also been established within the CMA which, in future, will oversee a new regulatory regime for the most powerful digital firms, promoting greater competition and innovation in these markets and protecting consumers and businesses from unfair practices.

  7. For media enquiries contact the CMA press office on 0203 738 6460 or press@cma.gov.uk

Published 19 April 2023