Google said today it will allow developers of non-gaming apps on the Play Store to provide alternative billing systems for in-app transactions and purchases for users based in the European Economic Area (EEA) — which includes 27 EU countries, Norway, Iceland and Liechtenstein. The company’s move comes after the European Parliament passed the Digital Markets Act (DMA) earlier this month to force tech giants like Google, Apple, Meta and Amazon to follow fair and open market practices.
In a blog post, the company said this new act will force “Google Play and other industry players to adjust their current operating model for users in the European Economic Area (EEA).” Companies failing to comply with these new rules can face a fine of up to 10% of their global revenues; these fines can increase to 20% of a company’s global revenue in case of repeat offenses.
“As part of our efforts to comply with these new rules, we are announcing a new program to support billing alternatives for EEA users. This will mean developers of non-gaming apps can offer their users in the EEA an alternative to Google Play’s billing system when they are paying for digital content and services,” Google said in a statement.
The company said developers will get a 3% relief from the fee they have to pay to Google Play while processing in-app transactions. The firm charges 15% for any developer on their first $1 million revenue of the year — that will now reduce to 12% if they adopt a third-party payment system. Google charges developers a flat fee of 15% for subscriptions and as low as 10% for developers qualified for Google Play Media Experience program. Other developers will need to pay 30% after their first million-dollar earning for the year.
Google said that developers will have to maintain certain standards of user protection and adhere to other rules of service fees. It noted that starting today it won’t reject any updates from developers offering alternative billing for EEA users, but they’ll have to stick to Google Play billing for other regions.
The search and advertising giant is already offering an alternative billing system in South Korea with a 4% discount on fees after the country passed a law forcing companies handling app stores to not restrict developers from offering third-party payment options. U.S. lawmakers are also looking to introduce rules that aim to end Apple and Google’s monopoly on app stores.
This year, Google has made different agreements with Spotify and Match Group over using third-party payment systems for in-app purchases for their apps distributed through the Play Store. Earlier this month, the company agreed to reimburse $90 million to U.S.-based developers over Play Store earnings to settle a lawsuit.