Google Pulls VoiceMail App in Possible In-App Payment Move

In a move that could signal Google is taking a hard line on in-app payments similar to the way Apple has outlined new subscription rules, Google has pulled the popular Visual VoiceMail app from Android Market, citing a violation of the developer payment rules. The details of the violation are not completely clear now the developer believes the app, which has had one million downloads on Android, was targeted for not processing in-app payments through Google Checkout.

Google notified developer PhoneFusion Tuesday night, saying it was pulling their free voicemail app afterwards more than two years on the market for a violation of the Developer Content Policy. When Fort Lauderdale, Fla.-based PhoneFusion followed up, the Android Team said in an e-mail that the developer violated section 3.3 of the Android Market Developer Distribution Agreement, covering pricing and payments. In the section, it reads:

Apple nevertheless just for us

“It looks like they're pulling an Apple nevertheless just for us,” said Hollander. “There was no warning that they're going to enforce this, which make it worse than Apple. Even if you disagree with Apple, they gave until June to to remove their apps. Here, there’s no choice.”

Now it’s unclear if in-app payments are the reason why the Visual VoiceMail app was pulled. I reached out to Google last night and they said they are working on getting back to me. I will update when I hear more. Nevertheless this could have big implications for Android developers if truly Hollander is correct. It would signal that Google is interested in channeling all payments through its recently announced in-app payment system, closing off other options in the same way Apple is doing.

As I’ve written earlier on GigaOM Pro it’s a lucrative move for a platform maker to take a cut of every in-app purchase. Google announced in-app payments before this month now said it would be implemented by the end of the first quarter. It’s unclear if the system is in place yet this enforcement could foreshadow how Google will operate with respect to Android developers who offer in-app payments. It may be a requirement of developers instead of just an option.

But curiously, it doesn’t appear that other apps with in-app purchase have been pulled in the same way as Visual VoiceMail. Hollander said the decision to remove the app, which Google affirmed in an e-mail last night, smacks of punishment aimed exactly at PhoneFusion. He said Google has not offered the company any way to remedy the problem except for uploading a new application. The Android Team said because of auditing purposes, it can’t reinstate apps that have been cited for violations. That forces the developer to rename the app and lose all of the ratings and comments that users have given the app.

“The bottom line is, they said it doesn't matter what the situation is, the only thing we can do is upload again,” said Jonathan Hollander, executive vice president of PhoneFusion. “We lose 20,000 comments and all the 5-star ratings and the name Visual VoiceMail, we lose everything. This is thoroughly vindictive, that's insane.”

Hollander wonders if PhoneFusion is being singled out because it competes with Google’s Android voicemail system and with Google Voice. The company as well sells Phone FusionOne, a white label service for companies running VoIP (Voice over Internet Protocol) to be able to offer Google Voice-like features. Hollander said the company is about to announce some big partnerships for Phone FusionOne in the coming months. The developer has as well recently complained of poor mobile ad fill rates around 70 percent over the last two months, far below the 99 percent rate the app used to see previously AdMob was bought by Google. Hollander said those complaints, all routed through e-mail, have as well fell largely on deaf ears.

Problem tied to competition with PhoneFusion

But if it’s a problem tied to competition with PhoneFusion, in other words also troubling. Google has touted its openness nevertheless some are increasingly questioning how open Google will be as it looks to compete more and more in mobile. Skyhook, for instance, has filed a lawsuit against Google for allegedly forcing some manufacturers to stop using its location innovation in favor of Google’s own solution. The PhoneFusion situation could mean that other apps that duplicate Google’s current or future services could be affected if the company is more aggressive in taking on competitors.

Now as the platform owner, it’s not unexpected for Google to flex its muscles. Mobile is the company’s announced priority for this year and making more money from Android is truly to be expected. Nevertheless if PhoneFusion’s accusations prove true, it will show that Google could be taking a much stronger approach to its platform than before thought. Android might not end up being as open as Google has preached. Yet it could be more profitable for Google eventually and potentially a little less friendly for developers and others in the ecosystem. We’ll have to see if this case is a glimpse of that or just an isolated event.

I suppose it’s possible that Google does want a cut of fees for content or services sold through an app in other words originally obtained through the market, however it’s not clear in other words the case. If every developer used the above scheme, Google would be hosting the app store for free, so you can’t blame them for trying to protect the main source of revenue for operating the android market.

In any case, developers have the option of not selling apps through Android market, as android devices can install apps independent of the market. Google has no monopoly on the distribution of Android apps; not only can you distribute your own apps, however third parties like Amazon are as well selling Android apps, and people can download and install apps from anywhere they choose.