Google yields to developer pressure, cuts subscription-based app fees to 15%
Google has reduced its commission on subscription-based apps from 30 per cent to 15 per cent, following huge and sustained protests from developers whose apps are on the Google Play Store.
The search engine giant said the 50 per cent reduction in fees is one of the amendments to its Play Store developer terms as part of its ongoing efforts to ward off regulator scrutiny regarding potential market dominance.
In a blog, Google outlined plans to apply a 15 per cent fee on in-app subscriptions from the moment users sign up, beginning from 1 January 2022.
Currently, Google charges developers 30 per cent of whatever they make from subscription-based apps on Play Store for the first 12 months. It then reduces the fee to 15 per cent after the 12-month period. But from January next year, the 15 per cent fee will be from day one.
Google Vice President of Product Management at Google, Sameer Samat explained that the current model makes it difficult for developers to benefit from the lower level of commission due to churn.
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Many users tend not to stay with subscription-based apps for up to one year, so developers don’t get to enjoy the fee reduction from 30 to 15 per cent. But all that is changing from next year.
Meanwhile, some developers of e-books and on-demand music streaming services will also be eligible for a 10 per cent fee which is being applied immediately.
Google previously made concessions for app developers as is faces competition pressure from authorities in its home market and elsewhere.
US attorney generals upped the pressure on Google earlier this year, filing a lawsuit alleging the search giant stifled competition in the Play Store.
Google is not the only tech giant accused of shortchanging app developers. Apple also faced a class action, in which a US court ordered them to allow app developers to receive payments outside of its platform. But the court fell short of ordering a reduction in the 30 per cent fee Apple also charges developers.
With this 50 per cent fee reduction, Google has alleviated a class action by developers, scrutiny by regulators, and possibly motivated Apple to also reduce its fees.
