Google will allow Android developers to use competing payment systems in Europe

A statue of Android was displayed in front of a building on the Google campus on January 31, 2022 in Mountain View, California. Google’s parent company Alphabet will report fourth-quarter earnings on Tuesday after the bell closes.

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Google will allow developers of non-gaming applications to use competing payment systems in its Android operating system for some European users, the company announced Tuesday.

This is a change that the company has resisted in the past and still does not extend beyond Europe. The move comes after the European Commission, the executive body of the European Union, adopted Digital Markets Lawa broad set of rules aimed at limiting the bargaining power of so-called digital gatekeepers.

Legislation prohibits big tech firms from prioritizing their own services over competitors that rely on app stores. A key bill targeting Big Tech in the US has the same goals, but has Senate floor vote not yet scheduled.

Google wrote on his blog that his change, which will take effect in the European Economic Area, which includes EU member states and several other countries, was an attempt to meet DMA requirements.

Fellow app store operator Apple expressed concern that the use of alternative payment systems could weaken the security of users. Google said that developers using a different billing system in the EEA “will be subject to applicable user protection requirements.”

Developers who choose to use a different payment system will still be required to pay for and comply with the Android and Play Store service fees. But these developer fees at Google will be reduced by 3% when the consumer chooses a different payment system. The company said that for many developers, this usually means a change in fees from 15% to 12%.

While Google has said its Play Store billing system will continue to be required for apps on its marketplace distributed outside the EEA, it plans to expand billing alternatives for game app developers to users in Europe prior to the DMA effective date.

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