On Monday, Google announced that it would be clarifying the in-app purchase billing policies for its Google Play app store. In the interest of consistency and fairness, Google states that it will “be more explicit that all developers selling digital goods in their apps are required to use Google Play’s billing system.” And, consequently, they will be required to pay Google 30% of the money they earn from it. Developers will have until September 30, 2021 to make the change.
This move might have been prompted by the recent expulsion of Epic’s game Fortnite from both Apple and Google’s app stores for violating those in-app purchase policies. But whether Google thinks it’s being clearer now or not, that still leaves a rather big question for this blog.
Will this affect ebooks?
Historically, some developers such as Netflix and Spotify—and, of course, Amazon—have been able to bypass the in-app purchase requirement by using their own credit card payment system. But Google’s new payment guidelines requiring use of their billing system for in-app purchases explicitly state that they will apply to “subscription services (such as fitness, game, dating, education, music, video, and other content subscription services)”. They don’t specifically mention ebooks, but they do also cover items, app functionality or content, and cloud software and services. You could make a case that ebooks fit into several of those categories.
As we noted when Apple started enforcing its vig in 2011, the book industry has very tight margins, and there’s just no room for Amazon to pay another 30% of the purchase price of its ebooks on top of its other costs—whether it’s paying that surcharge to Apple or to Google. Amazon got around this with Apple by removing in-app purchase functionality from its iOS apps altogether. Other apps either followed suit, or raised their prices by 30% to Apple users. (Ebook stores couldn’t take the latter approach, though, given that agency pricing locks in ebook prices across every vendor and every platform.) They could certainly do the same again for Android users.
Since Android is much more open than Apple, developers could go the same route as Fortnite, and make a non-crippled version of their app available for download from their own site. While this does make it harder to get people interested in a stand-alone app, multi-platform services like Spotify or Netflix would probably have an easier time of enticing their users into downloading Android apps from them.
Given that Amazon has its own broadly adopted Fire tablet platform and app store, and makes the Fire app store available for free download to any Android user, it’s possible Amazon might hardly even notice if it had to pull its Kindle app from Google Play. All it would have to do would be to prompt Android users to add its app store any time they visited Amazon’s web site. (And another part of that Google announcement I linked earlier focused on making it easier for users to install and use other app stores in the new Android 12 release.) Of course, other ebook stores such as Nook or Kobo that don’t have such big platforms wouldn’t have it so easy.
Given that it’s still early days yet, there hasn’t been a lot of time to react for developers who would be affected by this change in payment policies. But if this is going to affect all the major subscription and media services, sooner or later you can expect them to start voicing much the same complaints as they did when Apple started enforcing its policies. It should be interesting to keep an eye on this over the next few months.
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