Google decide to decide to expand in-app purchase enforcement to every app on google-play-store.
Even though apple-store already has taken 30%, play-store stick on applying their in-app purchase enforce rule only limited to Game contents. If it is not game contents, company can use other payment method with low fee (around 10%). However, the principal finally got broken on 28th, Sep. Google announce that developers must use Google’s billing system for every digital content until 30th, Sep, 2021. Since for each transection held on billing system, Google will charge 30% fee, the statement mean is that ‘If you want to sell something from android app, you must give 30% fee to Google’. Since android allows a various app-store (independent app store) on their devices, the announcement faces not much criticism, compared to apple app store. However, because this announcement is based on their monopolistic status on mobile application ecosystem, some companies blame about the policy. (Leswing, 2020)
Who will be affected?
Customers will be victims from the policy. Since the revenue is going to be decreased to 20~30%, companies with mobile application are likely to increase their price for contents. Company and independent developer also will take a hit because their marginal revenue suddenly drop.
However, Google can make more revenue from this policy and get more purchase data from the mobile app which are registered in their store. Furthermore, independent app store, such as Amazon app store or Aptoide, can be beneficial from this policy. It is because if the contents price get increased, price-sensitive customers might immigrate to another App store.
Insight/Discussion
However, there are not many customers that defense their wallet actively by immigrating from Play-store to independent store. It is because it is one of important strategy of platform business that ‘people do want to break their habits’. Moreover, those independent app stores are not ready to give user experience as much as play-store.
What are the other examples of digital platform policy changes using monopolistic power? Are independent vendors for mobile apps really beneficial from this policy? What else can be effect of this change?
Leswing, K., 2020. Google To Enforce 30% Take From In-App Purchases Next Year. [online] CNBC. Available at: <https://www.cnbc.com/2020/09/28/google-to-enforce-30percent-cut-on-in-app-purchases-next-year.html> [Accessed 7 October 2020].
Dear Junyeob,
This makes me think about the article “Managing Hub economy” from Marco Iansiti. These companies really have the ability to control our lives completely. This is why the hub should be part of the solution and creating a better ecosystem for all. They should sustain the networks and communities we all ultimately depend on. Big companies like google should consider the long-term societal impact of their decisions and to prioritize their ethical responsibilities to the large economic ecosystems that increasingly revolve around them. By increasing the price, this is not cooperating with customers but rather utilizing their power.