Yesterday, Google unveiled the changes it will make to comply with the European Union's Digital Markets Act (DMA) which came into effect today. However, one important detail it left out was whether it would charge developers who direct users outside the Play store to download apps – and if so, how much.
Now, Google has revealed that it will indeed impose fees on developers even if they do not use the Play store, much like Apple did with the App Store. According to new details found in the Play Console help section, the company will impose two new fees:
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Initial purchase fee of 10% for in-app purchases or 5% for annual subscriptions. This represents the value Play provides in facilitating initial user purchases.
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Ongoing service fee of 17% for in-app purchases or 7% for subscriptions. This covers ongoing Play services like parental controls, security, fraud prevention, and app updates.
Developers can opt out of ongoing service fees after two years if users agree, but ongoing Play services will no longer apply. "Since users purchased the app through Play with the expectation of continued services such as parental controls, security scanning, fraud prevention, and ongoing app updates, discontinuation of services requires user consent," Google stated.
Google included the following diagram to show how fees will apply to the hypothetical "Fantastiq app":
With this, Google is taking a similar approach to Apple, which reduced App Store fees but introduced new fees. In other words, Apple introduced a new "payment processing fee" of 3% for transactions passing through its store. And a new "core technology fee" will charge a fixed fee of €0.50 for each app download, regardless of whether it comes from app stores or third-party websites, after the first million installations.
Google justifies the fees by showcasing the value it provides in the Android ecosystem: "Play fees support our investment in Android and Google Play and reflect the value provided by Android and Play, including enabling us to distribute Android for free and provide the growing and evolving suite of tools and services that help developers build successful businesses while keeping our platforms safe and secure for billions of users worldwide."
Epic CEO Tim Sweeney already criticized Google's post on DMA compliance yesterday before the new fees were even announced to the public. "Google announced their over-the-top compliance plans for the European DMA… Looks like their unlawful anti-steering policy will be replaced by a brand new Google tax on internet transactions. We'll soon learn how they and other developers react to new fees."
