Tag: loophole

29
Sep
2020
Posted in technology

Google is closing a loophole for developers to avoid paying its in-app payment tax

  • Google announced in a blog post on Monday that it’s closing a loophole which allows some developers to side-step its 30% tax on in-app payments.
  • Developers will have until September 31 2021 to integrate Google’s billing system.
  • Google also said it will make it easier for users to install alternative app stores to its own.
  • The change may mean apps such as Netflix, Spotify, and Tinder which have avoided the 30% fee put up their prices on the Play Store.
  • Visit Business Insider’s homepage for more stories.

Google said it will clamp down on a loophole that allows big developers like Netflix and Spotify avoid paying 30% commission on in-app payments.

Until now, developers have been able to side-step the 30% commission that comes with using Google’s in-app payment system by getting users to enter their card details directly.

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

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

The upshot is that apps that sell you subscriptions, digital media, or virtual items will have to shift to this system and pay Google’s 30% levy, and it may mean an accompanying rise in prices.

Business Insider has approached Spotify, Netflix, and Tinder for comment.

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

This announcement from Google comes after a drawn-out fight between Apple and developers on a similar mandatory commission on the App Store.

This resulted in major developers including Spotify, Epic Games, and Match Group forming an alliance called the “Coalition for App Fairness” on Thursday. It