Google cuts app store fees to 15% after regulatory, developer issues

Google has slashed its commissions on all subscription-based businesses on Google Play Store from 30% to 15%, effective on January 1, 2022.

Before the latest change, Google’s service fee would only drop from 30% to 15% after app owners had 12 months of recurring subscriptions. Going forward, developers will only have to pay 15% in commission fees from day one. 

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The company has also made changes to the service fee in its Play Media Experience program. Apps that offer services like ebooks and on-demand music streaming will now be eligible for a service fee as low as 10%.

Google said that it was moving beyond a “one-size-fits-all” model to make sure that different businesses become successful through its app store. 

“Instead of a single service fee, we now have multiple programs designed to support and encourage our diverse app ecosystem,” the company said in a statement. 

Google buckles under regulatory challenges, developer backlash

The company’s latest announcement comes amid increasing regulatory scrutiny over the app store policies of Google and Apple. 

In August, South Korea’s National Assembly approved a so-called “anti-Google law,” which prevents both app store operators from mandating developers to use their in-app billing systems. 

Google and Apple are also facing challenges in Australia, where the local competition watchdog is reportedly considering regulating digital payments on the two app stores.

Apart from regulatory challenges, both firms have also faced criticism from developers, which has led to various lawsuits and instances of public outrage. 

Apple last year announced a new scheme which offered a reduced commission fee to businesses that earned up to US$1 million in proceeds. In March, Google announced a similar model. 

Despite Google’s move to cut its commission fees, the Alliance of Digital India Foundation (ADIF) said that the latest changes do not address the issues and challenges of developers who will be forced to use Google’s billing system – a policy which will be mandated by March 2022.

“It has never been about the percentages,” says Sijo Kuruvilla George, ADIF’s executive director. “Price discovery should be left to market forces. As long as Google gets to unilaterally dictate prices, and people don’t have choices, it’s still a Lagaan (an obsolete and oppressive form of taxation in India). Be it 30, 15, or even two – the percentages do not matter.”