Business News Digital Legal
By Chris Cooke | Posted on Tuesday, May 3, 2022
Bandcamp last week filed legal documents with California courts seeking an injunction ordering Google to ensure the direct-streaming company’s app remains available in its Play app store even if it fails to comply. to an upcoming rule change regarding payments. It’s the latest legal battle against the tech giants’ App Store rules, the biggest of which to date has been fought by Bandcamp’s new parent company, Epic Games.
The rules introduced by Google and Apple on all applications available on Android and iOS systems respectively have proven to be more and more controversial over the years, and in particular those relating to payments. For some app categories, any in-app payment must be made using Google’s or Apple’s proprietary transaction systems. Many app owners say these rules are anti-competitive, especially when Google and Apple themselves offer competing services.
Because, for example, Spotify – which has a profit margin of around 30% – cannot afford to swallow a 30% commission from Google or Apple. Which means that in order to accept in-app payments, the 30% App Store commission would have to be passed on to the customer. Which would then give the impression that its subscription prices are more expensive than the music services operated by Google and Apple.
Although Google and Apple deny that their app store rules are anti-competitive, those rules have recently been changed, largely due to pressure from litigation and regulatory interventions.
Apple, for example, is relaxing a rule that not only must apps accept in-app payments using Apple’s transactions system, but the app maker can’t sign other payment methods outside of it. of the application that bypass the Apple system. Following a settlement with a competition regulator in Japan, Apple will allow so-called player apps – which include Spotify – to start flagging alternative payment options.
For its part, Google seems to want to go even further, although initially via a pilot project. In March, Google announced that it would allow Spotify to accept in-app payments on Android devices using its own transactions system, as long as it also offered the option to pay through Google’s transactions system. This appears to be a major win for Spotify in this area, although the details of how it will work – and how quickly it will roll out to other apps – are still unclear.
While this pilot removes an unpopular Android rule, for Spotify at least, another change to Google’s terms and conditions for app makers actually extends the same unpopular rule to more apps. Hence the new beef with Bandcamp.
Previously, on Android – unlike iOS – apps weren’t required to use Google’s transactions system when selling digital content consumed outside of the app, such as a music download.
However, a rule change first announced in 2020 means that from last month the sale of such content must use the Google transactions system, and apps that did not switch to the Google payment method at the start next month will be removed from the Google Play store.
In its legal filing last week, Bandcamp said it was initially unclear whether the rule change would indeed affect its Android app. Once it became clear last summer that this would be the case, the company entered into talks with Google, which eventually said it would offer direct-to-fan service a special 10% commission rate.
However, Bandcamp co-founder Ethan Diamond wrote in the legal filing that it still doesn’t work. “Google’s policy change isn’t working for our community or our business,” he said. “Even with a 10% revenue share rate, we either had to pass those fees on to consumers (making Android a less attractive platform for music fans), pass those fees on to artists, or manage our Android business in the long term loss of term”.
Not only that, legal deposit continued, but the switch to Google’s payment system would likely slow the speed at which artists would receive their payments, from the current 48 hours to 45 days. Google Play billing also cannot handle the sale of physical products – which is also a key part of Bandcamp’s business – so they would have to operate two billing systems, one for digital products and one for physical products .
To avoid all this, Bandcamp could simply stop supporting payments for digital content through its Android application, which is already the case on its iOS application, since Apple’s rules have always imposed the use of its system. transactions for this type of sale.
Explaining how things currently work on their iOS app in the Legal Folder, Bandcamp said: “If a user attempts to purchase a digital album or song in the Bandcamp iOS app, they see a message stating that the content is not is not available for purchase on this device.’ Instead, the user can add the digital content to their “wishlist”, which prompts an email from Bandcamp to the user with information about the how to purchase digital content on the Bandcamp website”.
But this approach would be far from ideal, of course. Not only would this be annoying for all Android customers using Bandcamp, especially younger users, but it would likely prevent a sale from continuing. “If there is no way for these [younger] consumers to purchase digital music directly from the Bandcamp app,” Diamond continued, “I expect some of them to not purchase digital music from Bandcamp at all.”
“Also,” he added, “if there’s no way to buy digital music in any version of the Bandcamp app, I expect some artists become less engaged with Bandcamp or leave the service altogether, making Bandcamp less attractive to fans and artists alike.Thus, the removal of digital sales in the Android version of the Bandcamp app may impede our ability to maintain engagement of fans and artists and to continue to develop Bandcamp”.
With all of this in mind, Bandcamp would seek an injunction prohibiting Google from “deleting, delisting, refusing to list, or otherwise rendering unavailable the Bandcamp application, including rejecting or refusing to distribute any updates to this application. , from the Google Play Store on the basis that Bandcamp offers in-app payments through means other than Google Play Billing”.
By taking legal action against Google over its app store rules, Bandcamp is likely benefiting from the expertise of its new parent company, which has filed multiple lawsuits in multiple countries against Apple and Google over in-app payments.
Google noted this during its response to Bandcamp’s legal filing last week. “This is another baseless claim by Epic, which is now using its newly acquired app Bandcamp to further its efforts to avoid paying for the value provided by Google Play,” a spokesperson said.
On the specifics of Bandcamp’s beef, the spokesperson insisted that Google’s flexibility meant that its app store rule change was not detrimental to the direct-to-fan company in the way. she claimed in her trial.
“We’ve been transparent about Play’s payment policy for over eighteen months and, as Epic knows, Bandcamp is eligible for a service fee of only 10% through Play’s Media Experience Program – far less than the fees they charge on their own platforms,” they added.
“Despite their claims, Android’s openness means that Bandcamp has multiple ways to distribute its app to Android users, including through other app stores, directly to users through their website, or as a ‘consumer app only like they do on iOS’.