Google plans to close loophole that allows Netflix, Spotify and Tinder to avoid paying its 30% app tax

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  • Google announced in a blog post on Monday that it was removing a loophole that allowed some developers to bypass its 30% tax on payments through the app.
  • Developers will have until September 31, 2021 to integrate with Google’s billing system.
  • Google also said it will make it easier for users to install alternative app stores.
  • The change may mean apps like Netflix, Spotify, and Tinder that have avoided the 30% fee are increasing their prices on the Play Store.
  • Visit the Business Insider homepage for more stories.

Google said it will close a loophole that allows big developers like Netflix and Spotify to avoid paying a 30% commission on payments through the app.

So far, developers have been able to bypass the 30% commission associated with using Google’s in-app payment system by tricking users into entering their card details directly.

Google vice president for product management Sameer Samat wrote in a blog post on Monday that the company was giving “clarifications” to its billing policies.

Samat wrote that “all apps selling digital products” will have until September 30, 2021 to switch to Google’s billing system.

The upshot is that apps that sell you subscriptions, digital media, or virtual items will have to switch to that system and pay Google’s 30% tax, which can lead to price increases.

Business Insider has reached out to Spotify, Netflix and Tinder for comment.

Samat wrote that Google’s own apps would also be subject to the commission, and the changes would only affect less than 3% of developers.

This Google announcement comes after a long battle between Apple and developers over a similar mandatory commission on the App Store.

This has led major developers, including Spotify, Epic Games and Match Group, to form an alliance on Thursday called “Coalition for App Fairness.” It also comes after Apple waived its usual fee for a Facebook feature in a rare concession.

Epic Games are currently suing Apple and Google for their costs.

Unlike Apple, which only allows iOS devices to support its App Store, Samat wrote in his blog post that Google plans to make it easier for users to get their apps from places other than the Play Store. official.

“We believe that developers should have a choice in how they distribute their apps and that stores should compete for consumer and developer activities,” Samat wrote, adding that the release of Android 12 in the year next will include features that will make it easier for users. to install alternative application stores on their phones.

However, there seems to be a nuance here. Samat suggested that developers would not be able to tell users how to avoid Google’s in-app tax in their Google Play app.

He wrote, highlighting ours: “The developers asked if they could communicate directly with their customers about prices, offers and other ways to pay beyond their app through email or other channels. .

“To clarify, Google Play has no limitation here on this type of communication outside of a developer’s application. ”

Google’s post appears intended to avoid accusations of anti-competitive behavior.

Developers have complained in the past that Apple wields monopoly power by only allowing iOS devices to use its App Store, forcing developers to pay its 30% payment commission. Google allows Android users to install apps from stores other than its Play Store, although the Play Store remains the primary means for most people to access apps.

Google is currently under a specific antitrust review in the United States, with the Department of Justice (DOJ) preparing to announce an investigation into the company – although that investigation will focus on Google’s dominance as a driving force. of research.

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