One of the things that sets Google’s Android operating system apart from Apple’s iOS is that Android has always allowed users to sideload applications, as well as allowing device makers to pre-load third-party app stores… as long as they were in addition to the Google Play Store rather than a replacement for it.
But the Google Play Store is still the most popular way for users to get apps and games, and historically Google has taken a cut of revenue generated from every app purchase, subscription, or in-app purchase from apps distributed through the Play Store. Now the company is loosening its restrictions on third-party billing… for customers in the US, anyway.
The move comes as part of a legal settlement with a group of state attorneys general, who had charged the company with abusing its dominance in the Android app space to require developers to use Google Play Store billing for in-app purchases… and prohibited them from even including language in their apps alerting users to the possibility of paying their subscriptions outside of the Play Store.
For example, if you use the Play Store install the Spotify or Netflix app on your Android phone or tablet and then sign up for a subscription through the app, Google would get a cut of the revenue because users would never see an option to pay in any other way.
On the other hand, if you signed up for a subscription on the Spotify or Netflix websites, you could login to your account on the mobile app and Google would never take a cut.
Now Google says it will let developers include language in their apps letting you know that this is an option. But the company will not allow developers to include links to external websites where you can make a payment.
What the company will do, is allow developers to include alternate billing options within the apps themselves, allowing users to choose between Google Play billing or third-party billing.
Will most users actually bother to use third-party billing? That probably depends on how it’s implemented. If Netflix or Spotify were to offer discounts, for example, for using their own billing systems rather than Google’s, then this could have a major impact. And Google is prohibited by the settlement from blocking companies from offering their best prices to customers who choose Google Play billing.
But an important caveat is that many aspects of the settlement are time-limited. For example, Google is only required to let developers offer alternate in-app billing for five years. After that time Google could theoretically block alternate billing systems again and/or require companies who use them to offer the same prices to customers that opt for Play billing.
Interestingly, the settlement also only requires Google to support sideloading of apps that aren’t available in the Play Store for 7 years. That’s a feature that’s been available in Android since day one, so it would be surprising to see Google eliminate it altogether in 2030, but it looks like the folks negotiating the settlement didn’t want to tie Google’s hands beyond 2030… presumably in case the company ends up losing too much ground to third-party app stores or billing systems in the coming years due to this settlement.
Google has also agreed to pay $700 million in fines, nearly $630 million of which will be distributed to customers who have overpaid for apps or in-app purchases using Google Play Store billing.
You can read the full 68-page settlement for more details.