Google is easing its grip on the monetization of Android applications in Europe, a move that follows years of developer complaints and increasing regulatory scrutiny from Brussels. As reported by Bloomberg, the tech behemoth announced on August 19 that it will permit app developers to direct users to external websites for payments related to subscriptions, upgrades, and other digital purchases—an option that had previously been largely restricted.
This shift is designed to align with the European Union’s Digital Markets Act (DMA), which imposes hefty fines on companies that maintain excessive control over their platforms. For consumers, this change may lead to lower app prices and a broader array of payment options, while developers stand to benefit from retaining a larger portion of their revenue.
Developers get more breathing room
Historically, developers on the Play Store were required to utilize Google’s in-app payment system, which meant surrendering up to 30% of each transaction. The newly proposed External Offers Program allows developers to direct users away from the Play Store checkout for purchases. Additionally, Google is reducing its first-year acquisition fee from 10% to 3%, while maintaining a tiered fee structure to address what it describes as security and platform costs.
Clare Kelly, Google’s senior competition counsel, emphasized the company’s commitment to user protection. “Moving consumers away from the store’s protected environment creates serious security risks,” she noted. “But we want to give developers more flexibility and options.”
Brussels isn’t letting up
In March, the European Commission accused Google of violating the DMA by limiting how developers could guide users to more affordable options outside of the Play Store, as well as favoring its own services in search results. The DMA, which has been in effect since 2023, aims to rein in major tech companies, designating firms like Google, Apple, Meta, Amazon, and Microsoft as “gatekeepers.” It prohibits self-preferencing and mandates that these companies open their platforms to competitors. Penalties can reach up to 10% of a company’s global revenue, doubling for repeat offenders.
Both Apple and Meta have already faced significant fines of €500 million and €200 million, respectively, while Google has incurred over €8 billion in EU antitrust penalties over the last decade.
A delicate balance
Google has consistently argued that allowing users to bypass its payment system could expose them to risks such as fraud, phishing, and malicious applications. While independent researchers acknowledge these risks, some contend that Google has overstated the dangers to protect its lucrative commission model.
The next steps will hinge on the European Commission’s evaluation of Google’s new measures. Should regulators find these changes inadequate, Google may need to revise its approach or face new charges and penalties under the DMA. If approved, this would represent one of the most significant transformations of the Play Store since its inception.
As Google navigates this complex landscape, it must strike a careful balance. Complying with the EU’s regulations preserves its Play Store operations, yet each concession chips away at the control and revenue streams that the company has long relied upon.
