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Why Google’s changes to Play Store will not really benefit app developers

While Google’s Play Store changes sound like a win for app developers, it really isn’t going to benefit them because commissions remain.

Google said last week that it is making changes to Android and Play Store to comply with the antitrust orders issued by the Competition Commission of India (CCI). Among the changes, one is that Google will allow app developers to use a third-party billing system along with Google’s billing system for in-app purchases. While this sounds like a win for developers, it really isn’t going to benefit them all that much because it doesn’t address the core of the issue: developers have to pay hefty commissions to Google.

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Developers will likely end up paying as much as they pay currently: Developers do not have qualms with using Google’s billing system per se. In fact, the convenience and security of the system are a boon to developers as consumers can easily pay for in-app purchases. What developers do have a problem with is sharing as much as 30 percent of their revenue with Google. They’ve been asking for the ability to use different payment systems to avoid this commission but the changes Google is making will not give this benefit to developers. Even when users pay using a third-party payment system, the app developer has to pay Google a commission, albeit it will be 4 percent lower than what they usually pay. For example, a developer that used to pay 30 percent will now pay 26 percent. But if you account for the commission the developer will have to pay to the third-party payment provider, it will likely add back the 4 percent saved from Google. At the end of the day, developers will shell out the same amount from their pockets as they are doing now.

Can CCI do anything about it? It’s not clear if CCI will wade into pricing matters. In its order, CCI doesn’t rule whether a 30 percent commission is justified or not. Instead, it only deals with whether developers have more options or not. Now that developers will have more options, will Google play fair?

Even in the landmark US case between Apple and Fortnite-maker Epic Games, the judge refused to rule on reducing Apple’s 30 percent commission. “Indeed, while the Court finds no basis for the specific rate chosen by Apple (i.e., the 30% rate) based on the record, the Court still concludes that Apple is entitled to some compensation for use of its intellectual property,” the US judge ruled.

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