A Google office.
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Is this the end of the app store tax?

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Good morning! Google is testing out allowing apps to use alternative billing options for Spotify. That’s good for consumers, good for Google, but what does it mean for Apple? I’m Ben Brody and, ever since getting invited out for “hot red wine” (??!), I've been wondering if we weren't on to something with pandemic restrictions.

Also, we want to know about your favorite under-the-radar websites or apps. What’s a platform you use that you don’t think other people know of? Read the bottom of this email for more information, then respond to this email and let us know!

Your move, Apple

Google’s announcement yesterday that it’s going to let Spotify try out non-Android payment options is the culmination of a brutal, multicompany, international battle — and Google’s concession that the whole saga has irreparably changed the app store in ways it’ll take us years to figure out.

Google launched a “pilot” to allow alternative billing options in certain countries for Spotify, which had been a major architect of app developers’ unlikely success in taking on Apple and Google.

  • The move, which was really an extension of what Google had to do under a new South Korean law, also teased work with a few other developers, essentially hinting that it’s trying to work out a system it can roll out across Android in coming years.

Make no mistake: This is a concession that the old way of app stores is gone. It’d been going away for a while (see: fee discounts), and it’ll last in lots of places for a long time to come. But the era of Google and Apple just routing in-app purchases through their own payments systems and charging 30% to developers for the privilege is coming to an end.

  • There had been a lot of dents in the model: lawsuits (like Epic Games’ against Google), plus proposed legislation in states, in Congress and internationally.
  • They all came together to checkmate the companies, more or less. Or the corporate leadership realized they soon would.

The only question now is what replaces it. Google won’t just leave all the money on the table when it owns Android, has the ability to place and frame alternate billing systems and is always eager to cite its own security and privacy investments.

  • The case of Apple in the Netherlands would seem to provide a useful damper on the idea that consumers will suddenly be totally free of 30% fees.
  • iOS is just charging a generic fee to dating-app developers who want to use alternate billing systems under the country’s new antitrust ruling. It’s 27%.
  • Apple, by the way, seems to be perfectly happy to just take a loss as the government fines it repeatedly for what the authorities say is non-compliance.

Apple is the elephant in the room. Google’s move certainly puts pressure on Cupertino.

  • So long as Google and Apple basically held to the same fees in the same form, the commissions were basically a fact of life that developers and consumers had to accept. (Plenty of people would call that a duopoly.)
  • Now that Google and Apple are splitting in their approach, everything is up for grabs, and the forces of antagonism led by Spotify, Epic, Match and others may be scrambling.
  • Aside from fees to companies that want to try out new payment processors, which apps can even have them? In which regions will they exist? What security standards will they have to meet, and what pretexts will be used to dismiss them? Where and how easily will consumers be able to access them?
  • And it’s an open question how much those systems want to charge.

Nobody really has the answers to these questions right now. I’m guessing they’ll only become clear over years, through corporate announcements, ongoing developer lobbying, court decisions, legislative threats, enforcer fines and more. For now, though, the next move is Apple’s.

— Ben Brody (email | twitter)


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Making moves

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Airbnb is joining TechNet as a member, becoming the 10th company to do so this year.

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Koch Industries pivots to caring about climate change. After years of helping fund climate denial, the conglomerate has been investing millions in U.S. batteries and EV startups over the past year.

Arizona residents can now keep their driver’s license on their iPhones. Apple will eventually roll out the feature to other states.

Meta execs haven’t been working around Silicon Valley. A couple people headed to the U.K. and Israel, Adam Mosseri has been bouncing from Hawaii to Los Angeles to Cape Cod and Mark Zuckerberg has been splitting his time at a few locations.

Instagram’s chronological feed is finally back. Users can now see content according to the time it was shared in two different ways.

Russia blocked Google News. The government cited "unreliable information" on the war in Ukraine as its reason for the ban, as it continues to crack down on information sources in the country.

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