Both Google and Apple love commissions produced from their app stores. Google, like Apple, enforces a stern rule – all in-app purchases should use the Google Play Store billing system. Why? So it can charge commissions. Google made it mandatory for app developers to use its in-house billing system, and those who would not follow would be kicked out of Play Store.
The company passed this rule in many countries without expecting any hostility. But CCI wasn’t ready to let the company exercise this policy and slapped it with a Rs 1338 crore fine. So, Google didn’t get to have its way as it does in most cases.
What is wrong with the new Google Play Store billing system policy?
Google came up with the idea that its billing system must be used for all transactions that happen on the app store. Even in-app transactions must happen using the Play Store billing system, giving users no choice to opt-in for third-party payments service. The first half is okay and understandable that all app purchases, which are one-time or subscription-based, use the in-house billing system. After all, Play Store is the platform that pushes these apps.
But Google somehow got the idea that because it offers a platform, it is also entitled to a commission on every cent of revenue generated by the app developer. Apart from the one-time purchase, app developers earn by infusing ads into apps and offering in-game goodies using real-world money. So, Google realized that it was an untapped revenue source and made modifications to its policies. CCI took notice and levied huge fines and didn’t allow it to enforce the policy in India.
Recently, we published a post explaining many incidents which caught the regulator’s eye. Being a monopoly, Google heavily pushes its apps on the Play Store and also bundles all its apps (most of which are useless for an everyday user). However, Google has paused the enforcement of new rules concerning the Play Store billing system. But that doesn’t mean that it will sit quietly. Google plans to appeal to higher courts and prove that it desperately needs commissions to survive and make Play Store a better place. However, it simply cannot pull out of India due to the astonishing number of Android users.