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Bandcamp joins parent company Epic in going legal over Google’s app store rules

By | Published on Tuesday 3 May 2022


Bandcamp last week filed legal papers with the courts in California seeking an injunction ordering Google to ensure that the direct-to-fan company’s app remains available within its Play app store even if it does not comply with an upcoming rule change around payments. It’s the latest legal battle against the app store rules of the tech giants, the most prominent of which to date have been fought by Bandcamp’s new parent company, Epic Games.

The rules instigated by Google and Apple over any apps available on the Android and iOS systems respectively have proven increasingly controversial over the years, and especially those that relate to payments. For certain categories of apps, any in-app payments must be taken using Google or Apple’s proprietary commission-charging transactions systems. Many app owners argue those rules are anti-competitive, especially where Google and Apple themselves offer rival services.

Because, for example, Spotify – which has a profit margin of around 30% – can’t afford to swallow a Google or Apple commission of 30%. Which means, to take in-app payments, it would have to pass on the 30% app store commissions to the customer. Which would then make its subscription prices seem like they 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, there have been some recent changes to those rules, mainly as a result of pressure stemming from litigation and regulator interventions.

Apple, for example, is relaxing a rule that says that – not only must apps take in-app payments using the Apple transactions system – but the app maker cannot sign-post alternative payment methods outside the app that circumvent the Apple system. As a result of a deal done with a competition regulator in Japan, Apple will allow so called reader apps – which include Spotify – to start sign-posting alternative payment options.

For its part, Google seems willing to go even further, albeit initially via a pilot project. In March, Google announced that it would allow Spotify to take in-app payments on Android devices using its own transactions system, providing the option is also offered to pay through the Google transactions system as well. That seems like a major win for Spotify in this domain, although the specifics of how that will work – and how quickly it will role out to other apps – are not yet clear.

Despite that pilot removing one unpopular Android rule, for Spotify at least, another change to Google’s terms and conditions for app makers is actually extending the same unpopular rule to more apps. Hence the the new beef with Bandcamp.

Previously, on Android – unlike iOS – apps were not forced to use the Google transactions system when selling digital content that was consumed outside the app, such as a music download.

However, a rule change first announced in 2020 means that, as of last month, the sale of such content does have to use the Google transactions system, and apps which have not switched to the Google payment method by the start of next month will be removed from the Google Play store.

In its legal filing last week, Bandcamp said that it wasn’t initially clear if the rule change would indeed effect its Android app. Once it became clear last summer that it would, the company entered into talks with Google, which ultimately said it would offer the direct-to-fan service a special commission rate of 10%.

However, Bandcamp co-founder Ethan Diamond wrote in the legal filing, that still doesn’t work. “Google’s policy change does not work for our community or our business”, he stated. “Even at a revenue share rate of 10%, we would have to either pass those fees on to consumers (making Android a less attractive platform for music fans), pass those fees on to artists, or run our Android business at a long-term loss”.

Not only that, the legal filing went on, but shifting over to the Google payment system would likely slow down how quickly artists would receive their payments, from the current 48 hours to up to 45 days. Google Play billing also can’t handle the sale of physical products – which is also a key part of the Bandcamp business – so they’d need to operate two billing systems, one for digital products and one for physical products.

To avoid all this, Bandcamp could just stop taking payments for digital content through its Android app, which is already the case on its iOS app, because Apple rules have always forced the use of its transactions system for this kind of sale.

Explaining how things currently work on its iOS app in the legal filing, Bandcamp said: “If a user attempts to purchase a digital album or song within the iOS Bandcamp app, they see a message that the content 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 on how to purchase the digital content on Bandcamp’s website”.

But that approach would be far from ideal, of course. Not only would it be annoying for all Android using Bandcamp customers, with younger users in particular, it would probably stop a sale from going ahead. “If there is no way for these [younger] consumers to purchase digital music directly in the Bandcamp app”, Diamond’s statement went on, “I expect that some of them will not purchase digital music from Bandcamp at all”.

“Moreover”, it added, “if there is no way to purchase digital music in any version of the Bandcamp app, I expect that some artists will become less engaged with Bandcamp or leave the service altogether, making Bandcamp less attractive for fans and artists alike. Thus, removing digital sales in the Android version of the Bandcamp app may hinder our ability to keep fans and artists engaged and to continue to grow Bandcamp”.

With all that in mind, Bandcamp would like an injunction prohibiting Google from “removing, de-listing, refusing to list or otherwise making unavailable the app Bandcamp, including rejecting or refusing to distribute any update of such app, from the Google Play Store on the basis that Bandcamp offers in-app payments through means other than Google Play Billing”.

By going legal against Google over its app store rules, Bandcamp is presumably benefiting from the expertise of its new parent company, which has filed multiple lawsuits in multiple countries against both Apple and Google regarding in-app payments.

Google noted that when responding to the Bandcamp legal filing last week. “This is yet another meritless claim by Epic, which is now using its newly acquired app Bandcamp to continue its effort to avoid paying for the value that Google Play provides”, a spokesperson declared.

On the specifics of the Bandcamp beef, the spokesperson insisted that Google’s flexibility meant that its app store rule change is not damaging for the direct-to-fan company in the ways it claims in its lawsuit.

“We’ve been transparent about Play’s payment policy for more than eighteen months and, as Epic knows, Bandcamp is eligible for a service fee of just 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 of distributing their app to Android users, including through other app stores, directly to users via their website or as a consumption-only app as they do on iOS”.