Google today details extra cost that will come with its compliance plan for the new Digital Markets Act, a new regulatory approach intended to boost competition in the app store ecosystem. While Google yesterday pointed to ways it already complied with the DMA — by allowing sideloading of apps, for example — it hadn't yet shared specifics about the fees that would apply to developers, saying that further details would come out this week.
That time is now, it seems.
Today, Google officially announced that it External offers program, launched yesterday, will actually have two fees. This new program allows developers of the Play Store to transfer their EEA users outside of their app, including sending them an offer.
These fees will make Google go the way of Apple, which cut its App Store commissions in the EU after it came under pressure from the DMA while introducing a new Core Technology Fee under which developers have to pay €0.50 for every first annual install above a 1 million threshold for titles distributed outside the App Store. Apple justified the fee by explaining the services that it provides to its developers extend beyond just payment processing and includes the work that it does to support app creation and discovery, craft APIs, frameworks and tools to help developers' work on their apps, fight fraud and more.
Google is taking the same approach, telling us today that "the Google Play service fee has never been just a payment processing fee — it represents the value that Android and Play provide, and supports continued investment across Android and Google Play, enabling user and developer features that people rely on," a blog post reads.
It declares that two fees will now accompany transactions from the External Offers program:
A front-end acquisition fee: 10 percent for in-app purchases or 5 percent for subscriptions over the first two years. It says that is the price of value Play brought in with the initial user acquisition through the Play Store.
An ongoing services fee, 17 percent on in-app purchases or 7 percent on subscriptions. This covers the "wider value Play provides to users and developers, including ongoing services like parental controls, security scanning, fraud prevention, and continuous app updates," according to Google .
Notably, a developer can opt out of the ongoing services and the associated fees after two years if the user is opted in. Users who downloaded the app directly expect to receive services like parental controls, security scanning, fraud prevention and automatic future updates for other apps, so opting out is dependent on user consent. And while Google does let the developer opt out of the fee, those services will no longer apply to the same users either. That can't be said in return for developers, though, because they will still need to file transactions involving those users that continue to receive their Play Store services.
Google today also provided more examples of just what this structure of fees would look like, in practice and fielded a bunch of general questions developers might have – like whether the program is opt-in or opt-out (it is the former only), whether it applies to games and apps alike, whether developers can opt-in only some of their apps and other more nitty-gritty integration details. It said that developers would need to register for the program as a business, rather than as an individual. The company, in addition pointed out that developers can remain able to use Google Play's billing system even while also participating in the external offers program.
Besides the External Offers program, Google announced two other programs this week that will allow alternative billing systems for in-app purchases. And these are widening to all developers whose apps hit EEA users this week.