Internet giant Google has decided to reduce the fee it charges developers on Play Store by half following a similar move by Apple in November last year.
The Alphabet-owned company said starting from 1 July, 2021, it will only take 15% of the first $1 million revenue earned by a developer in a year from sale of digital goods or services on the Play Store. Currently, it charges 30% commission from developers.
“With this change, 99% of developers globally that sell digital goods and services with Play will see a 50% reduction in fees. These are funds that can help developers scale up at a critical phase of their growth by hiring more engineers, adding to their marketing staff, increasing server capacity, and more,” Google said in a blog post.
More than 97% of apps globally do not pay any service fee as they don’t sell digital goods.
“We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed. Once developers confirm some basic information to help us understand any associated accounts they have and ensure we apply the 15% properly, this discount will automatically renew each year,” the blog posted by Sameer Samat, vice president, Android and Google Play, read.
October, Google had extended the deadline for developers in India to integrate with Play billing system to March 31, 2022 following widespread opposition. Google had said that apps on Google Play which offer in-app purchase of digital goods will be required to use Google Play’s billing system.
The move irked many Indian startups who came together to challenge the tech titan in courts. A group of 13-15 startup founders, including Paytm’s Vijay Shekhar Sharma, approached the Competition Commission of India (CCI) to air their concerns over Google's alleged misuse of market dominance in India. The consortium reportedly appraised the antitrust regulator of instances where Google could be posing a monopoly risk to the country’s app ecosystem.
CCI ordered an investigation into alleged antitrust practices by Google on the basis of a complaint filed by an unnamed informant in November. The probe planned to look into pre-installation of UPI-based payments app Google Pay on devices as well as preference given to the platform for in-app purchases on Google Play.
In its order, CCI has taken cognizance of the 30% service fee imposed by Google Play for all app purchases and in-app purchases and Google Play store’s directions to existing apps to switch to the Google Play billing system by September 2021.
Apple had reduced its App Store fees to 15%, from 30%, for smaller developers who earn less than $1 million a year in app revenue and in-app purchases.