Google announced on Wednesday a pilot program that allows a small number of application developers to bypass Google’s billing system and use their own payment methods. Does this mean that developers don’t have to pay Google a cut of app revenue? Not so good.
A loose coalition of companies including Spotify and Epic Games has been fighting the so-called “app store tax” for years and has taken Apple and Google to court, prompting regulators to investigate them for taking as much as 30 percent of app developers’ revenue % into the behavior. They argue that they are locked into overpriced billing, hosting and management services that sometimes do more harm than good.
So Google’s announcement that it will allow a handful of app developers to bypass Google Play’s billing system comes as a surprise. However, according to comprehensive media reports, Google will still get revenue from it, but it’s just a matter of “how much”. If users choose to pay Spotify directly instead of using Google’s billing system, Spotify won’t have to pay Google the full 15 percent cut, the people said. A Google spokesman said the company has yet to clarify financial terms on the issue.
Spotify declined to say what kind of commission it will pay Google in the pilot, saying only that the agreement is confidential. But a Spotify spokesman said the business terms met Spotify’s “fair standards.”
Google also declined to disclose details of the relevant commission structure. However, the company noted that the user’s choice of the billing system, such as in South Korea, will still involve service charges, regardless of which billing system the user chooses.
Therefore, Google still has to charge, there will still be commissions. As Google’s “first innovation partner”, Spotify is just negotiating a new agreement for itself, but the outside world doesn’t know what its current commission rate is, but the company seems to be lower than Google’s announcement last year. Be happy even at 10%.