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Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) subsidiary Google wants developers offering in-app purchases on its Play Store to exclusively use its internal payment system which gives it a 30% cut.
What happened: The Sundar Pichai-led tech giant said in a blog post that developers are expected to “pay a service fee of a percentage of the purchase.”
The vast majority of developers already use Google Play’s billing system, according to the company.
“Less than 3% of developers with applications on Play sold digital products in the last 12 months, and of this 3%, the vast majority (almost 97%) already use Google Play billing,” the company said.
The tech giant is giving developers until September 30, 2021 to make necessary updates and comply with its billing policies.
Because it is important: Google takes a 30% cut from payments made within apps on the Google Play store, the New York Times reported.
Netflix Inc (NASDAQ: NFLX) and Spotify Technologies Inc (NYSE: SPOT) have allegedly bypassed the Mountain View, California-based company’s billing system by allowing users to pay them directly with a credit card.
Rival Apple Inc (NASDAQ: AAPL) also faces criticism for similar policies, as it also charges a 30% cut for in-app payments.
Companies like Match Group Inc (NASDAQ: MTCH), Tencent Holdings LimitedEpic Games, owned by Epic Games, and Spotify have joined the Coalition For App Fairness in a bid to get the Cupertino-based tech giant to change its policies.
Epic Games is also involved in litigation against Apple and Google after their popular game “Fortnite” was removed from their respective app markets.
Price action: Alphabet Class A shares closed nearly 1.4% higher at $ 1,458.66 on Monday and were up nearly 0.4% in the after-hours session. On the same day, the company’s Class C shares closed 1.35% higher at $ 1,464.52 and gained nearly 0.4% in the after-hours session.
© 2020 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.
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