Google announced last week that starting October 1, developers enrolled in the US external content links and alternative billing programs must report transactions and successful downloads and pay the relevant Play service fee.
The fees are not new as an idea. Google had said for months it intended to charge them while not yet assessing or requiring reporting. What is new is that Google is moving aggressively and pushing up against the limits of their injunction. It remains to be seen whether this will succeed.
What it covers, and what it doesn't
These programs govern two things: payments taken inside your app through a billing system other than Google's, and links that originate inside your app.
A player who reaches your web shop without touching your app is not on that path. Emails, ads, Discord messages, creator videos, codes printed on something physical don't originate in the app, so none of it sits inside these programs.
That means two studios with identical web revenue can be in completely different positions on October 1, depending on how players find the shop. This is why we strongly believe in using DTC to take ownership of your customers and establishing out-of-app communication channels through email, social media, and creators and other influencers in your community.
The question to answer before October
There is much that isn’t known but, for now, we’re advising our partners generally not to enroll in the program until and unless there is more certainty that this will go into effect.
If most of your DTC revenue is coming via direct link outs, then we recommend exploring joining the program, but holding off until we have seen what the courts say and how Google pursues developers. It is possible that Google will be unable to force developers into joining this program, based on the injunction. If they are able to, however, and you want to keep your link outs active, it is worth knowing what that will take.
We also strongly recommend launching a webshop as soon as possible, if you don’t already have one, and habituating your player base to accessing your DTC channels organically, without going direct from the app. That revenue is still protected from this fee, so is worth prioritizing ahead of the October deadlines. Get in touch if you want a hand standing this up. You don't need to be a customer - we are happy to talk to any developer.
What nobody knows yet
The court has not cleared this. These programs exist because of the injunction in Epic v. Google, but it remains to be seen whether the court will accept this as a form of compliance. Google will argue a service fee on external transactions was not specifically prohibited - which the court-appointed economist, Nancy Rose, agrees with. But she also called out that a fee clearly falls within the scope of the injunction, and that the court should arbitrate any fee associated with DTC to avoid Google using pricing to replicate their prior anti-steering restrictions.
But it is worth noting that, in the US court system, it takes somebody making the case to bring this before the judge. It is likely that Judge Donato will look into this as part of his oversight of the Google injunction, but it will also be necessary developers who aren’t Epic to make the case that this anti-competitive. Until this is arbitrated, the question could stay open for month. I would assume that the three month lead time Google has given developers is that they anticipate needing for the court to respond, so we will be watching this closely.
The main uncertainty now - nobody knows how non-enrollment gets treated. Google is now limited in how much they can coerce apps to follow their payments policies, which is why we are recommending developers hold off on signing up until there is more clarity from the court.
What holds up either way
An email list you own. A Discord your team shows up in. Creator relationships that predate needing them. Ads pointing somewhere you control.
Those were worth building before this announcement and they hold whether the fees take effect, get revised, get challenged, or get set aside. We strongly recommend any developer who has been doing link-outs, but doesn’t have a webshop, start building one immediately. And use your link outs - and other in-game tactics - to acquire the information necessary to make your webshop successful.
The studios in the strongest position on October 1 will mostly be the ones who built that for unrelated reasons, years ago, when nothing was forcing them to. But there is still time to launch a broader set of DTC channels ahead of the deadline, so it’s not too late.
Google's program documentation
Rates differ by program, by content type, and by whether a player's install predates the rollout date. Go to the source:
- External content links program
- Alternative billing for users in the United States
- Billing choice program
Stash builds direct to consumer storefronts for game studios, so we have an obvious stake in this conversation. Nothing here is legal advice. If you are deciding whether to enroll in either program, talk to your counsel, and read Google's program documentation directly rather than anyone's summary of it, including ours.
