From January 1, 2022, Google will reduce its app store fees for all subscription-based services to 15%, down from 30%. This comes as the internet giant faces greater scrutiny in India and throughout the world for its app store policies.
For all subscription services, Google now charges a 30% fee, which drops to 15% after 12 months of recurring subscription. “Customer churn, we’ve heard, makes it hard for subscription businesses to take advantage of lower rate. As a result, we’re streamlining things to make sure they can handle it “In a blog post, Sameer Samat, Vice President, Product Management, Google, stated.
Ebooks and on-demand music streaming services, whose “content costs account for the majority of sales,” will be eligible for a further reduction in Google’s service fee, which “may be as low as 10%,” according to the company.
It’s worth mentioning that the reduction in this category, which Google refers to as the Media Experience programme, is at Google’s discretion and is based on high content expenses, according to the company.
“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 blog post, Samat stated that 99 percent of developers are eligible for a service fee of 15% or less, and that these changes were made after “learning from and listening” to developers from a wide range of industries and regions, including Bumble, Calm, Duolingo, PicsArt, and Smule, and that they 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’s Play Store commission has sparked a backlash.
While Google has traditionally charged a 30% royalty for apps selling digital products on their app stores, the company said in October of last year that it would begin enforcing this commission more aggressively starting September 30, 2021.
It went on to say that the move is only likely to affect about 3% of apps on the Play Store that don’t already use the company’s billing system.
However, due to strong opposition from the Indian developer community, the tech giant has postponed the implementation until March 2022.
In March 2021, Google also announced a drop in its commission rate to 15% for the first $1 million in revenue generated by developers utilising the Play billing system each year, which will take effect in July 2021.
However, Google is currently under investigation by India’s antitrust regulator, the Competition Commission of India (CCI), over the issue of paid apps and in-app purchases being forced to use the Google Play Store’s payment system.
The commission believes that such a limitation is unreasonable because it inhibits app developers’ option to choose their preferred payment processing system.
Apart from India, Google and Apple are being scrutinised in various countries, including the United States, for business activities relating to their respective app markets.
South Korea’s parliament passed a bill in September prohibiting app store owners such as Google and Apple from forcing app creators to use their own pricing systems for in-app transactions.
