Epic and Google are gearing up for another legal battle. You may recall that Google will soon launch a crackdown on in-app billing on the Play Store. The new rules require all apps selling digital goods to use Google Play Billing by March 31 in order for Google to get a share of the sales. Any non-compliant apps have been unable to send updates since March 31, but the real deadline is June 1, when such apps will be removed from the Play Store. Epic Games bought popular indie music site Bandcamp in March, and it’s already suing Google over its latest acquisition. Bandcamp does not comply with billing rules, so it should be banned in June. As part of its antitrust case against Google, Epic is filing a motion for a preliminary injunction to block Bandcamp’s delisting from the Play Store.
Epic has attacked Google and Apple over their app store rules and what Epic says are excessive fees. Back in March, there were a lot of questions about why the creator of fortnite and the Unreal Engine would buy an independent music site. A line of comment from Music Business Worldwide founder Tim Ingham seems to have nailed Epic’s strategy. Ingham notes that Epic failed to convince Apple to reduce its 30% cut on the App Store, in part because the alternative model Epic could demonstrate in court, the Epic Games Store and its 12% fees, was not profitable. Apple lawyers argued that the unprofitability of Epic’s Games Store justified Apple’s 30% fee.
band camp is a profitable digital content business, however. Bandcamp has a searchable content store, and it hosts and distributes content by charging artists a 10-15% commission. Ingham predicted that Epic would maintain Bandcamp’s business model as a viable alternative to Apple and Google’s app store fees, and that Epic would use its new acquisition to attack app store owners. Looks like we are seeing the first actions of this plan.
Bandcamp claims its business is incompatible with Google Play Billing
Epic’s court filing argues that “Google has a monopoly over the distribution of Android apps and uses its monopoly power to unlawfully tie its payment product – Google Play Billing – to its app distribution product – Google Play “. Bandcamp is used as an example of the damage this billing system will cause, arguing that Bandcamp’s business model is mostly incompatible with Google Play Billing.
Epic raises several issues with Google’s billing system. First, Bandcamp’s payment system is “tailor-made to maximize efficiency and minimize costs, allowing artists to get paid within 24-48 hours of a sale.” Google Play takes 15-45 days to pay, and Bandcamp’s fast system is intended to help independent artists pay their monthly bills on time.
Second, Epic claims that Bandcamp’s ability to give artists 82% of revenue would be jeopardized if Google agreed to a 30% cut. Epic also notes that Google offered the company a 10% commission sweetheart deal after Epic complained. Google continues to offer big businesses special discounts on its Play Store fees. Spotify has another special arrangement that allows it to run its own payment system alongside Google Play. Epic also declined the 10% deal, saying Bandcamp currently has a 7% profit margin on its 13% cut, so it can’t afford it.
One of the more interesting complaints is that Google Play Billing is simply not compatible with the type of store that Bandcamp runs. The first is that Bandcamp is a mix of digital and physical content. It makes sense for a music business – you can buy a digital download, a physical CD or vinyl record, and some band merchandise like a T-shirt, all in one store. Google Play Billing, which was intended for in-app purchases, is not designed for this and does not support physical sales. Bandcamp should support two different payment systems and run two payment systems. Bandcamp’s second compatibility issue is that it’s an open marketplace, with thousands of artists selling goods. Google Play supports payment from a single developer entity, not through thousands of sellers.
On the Bandcamp blog, CEO Ethan Diamond said, “If Google’s policy changes continue, starting June 1, we’ll either have to pass Google’s fees on to consumers (making Android a platform less appealing to music fans), pass fees on to artists (which we would never do), permanently run our Android business at a loss, or disable digital sales in the Android app.” Google’s new billing rules is the option Amazon and Barnes & Noble took earlier this month Poor Barnes & Noble is also an Android maker, and now it can’t sell e-books on his clean Material!
Epic’s antitrust case against Google is slated for April 2023, while non-compliant apps will hit the Play Store within a month. We will be on the lookout for further developments.
4:18 p.m. ET update: Google sent a statement:
This is another baseless claim from Epic, which is now using its recently acquired app Bandcamp to further its efforts to avoid paying for the value provided by Google Play. We’ve been transparent about Play’s payment policy for over 18 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 usual fee. they charge on their own platforms. 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 an app. consumption only like they do on iOS.