Google has decided to reduce its app store fees for all subscription-based services to 15 percent from January 1, 2022. Currently, it is 30 percent. The move has come when the digital distribution service provider is under high scrutiny over its app store practices in India and internationally, reported Moneycontrol.
Google currently charges a 30 percent fee for all subscription services which will be reduced to 15 percent after a year of a recurring subscription. “We’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can” said Sameer Samat, Vice President, Product Management, Google in a blog post.
E-books and on-demand music streaming services, where “content costs account for the majority of sales”, may see a further decrease in its service fee, perhaps as low as 10 percent”.
“The new rates recognize industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent,” Samat said.
In the blogpost, Samat highlighted that 99% of developers are eligible for a service fee of 15% or less and such changes come after “learning from and listening” to developers across many industries and regions, including developers like Bumble, Calm, Duolingo, PicsArt, and Smule and will help them “build sustainable businesses”
“We will continue to engage with developers to understand their challenges and opportunities — and how we can best support them in building sustainable businesses,” said Samat.
Google always levied a 30 percent commission for apps vending digital goods on their app stores, the firm in October 2020 said that it will try to proactively enforce this commission with effect from September 30, 2021.
It also noted that the change may impact less than 3 percent of apps on the Play Store which is not availing the company’s billing system.
However, after facing massive flak from the Indian developer community, the tech giant postponed the implementation to March 2022.
These adjustments might help Google combat complaints that it collects too much money from app sales, which has been a constant in recent years. Epic Games has filed a lawsuit alleging that the hefty cut for purchases is anti-competitive. Netflix, Spotify, and Tinder have secret arrangements with Google to lower service prices, giving them an advantage over smaller companies with millions of active users, according to the Epic complaint.