Google Play to Cut App Store Fee by Half on Developers' First $1 Million in Sales

Google said it would cut app store fees to 15 percent from 30 percent effective July 1.

By Reuters | Updated: 17 March 2021 09:50 IST

Google Play to Cut App Store Fee by Half on Developers' First $1 Million in Sales

It could have cost Google about $587 million (roughly Rs. 4,260 crore) had fee cut come in effect in 2020

Highlights

Google require developers to use their payment systems for transactions
The bite of transactions has been hotly criticised by developers
Apple and Google are also facing growing pushback from other tech giants

Alphabet's Google will cut the service fee it charges developers on its app store by half on the first $1 million (roughly Rs. 7 crore) they earn in revenue in a year, after a similar move by rival Apple last year.

Both the companies have come under fire from large firms such as Microsoft, Spotify, as well as startups and smaller companies, that allege the fees deprive consumers of choices and push up app prices.

Google said in a blog post on Tuesday that it would cut app store fees to 15 percent from 30 percent effective July 1, a move that would impact most of the developers on its app store.

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In contrast, Apple said in November it planned to lower its commissions only for developers who make $1 million (roughly Rs. 7 crore) or less in proceeds in a year from its app store.

Fortnite creator Epic Games said in a statement to Reuters that Google's move only alleviates some of the financial burden of developers.

"Whether it's 15 percent or 30 percent, for apps obtained through the Google Play Store, developers are forced to use Google's in-app payment services," Epic said.

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Epic has been at loggerheads with Apple since August when the game maker tried to avoid paying fees on the iPhone maker's app store by launching its own in-app payment system, which prompted Apple to ban Fortnite from its store.

Data analytics firm Sensor Tower estimated that it could have cost Google about $587 million (roughly Rs. 4,260 crore) — or about 5 percent of the $11.6 billion (roughly Rs. 84,190 crore) it earned from Google Play last year — had the service fee cut come into effect in 2020.

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