Google to Lower Its App Store Fees for Developers to 15%
The move is a concession to regulators and lawmakers, who are challenging whether the company has overcharged developers.,
Google plans to lower the cut it takes in its app store to 15 percent.
- Oct. 21, 2021, 1:44 p.m. ET
Google said it planned to lower the cut it takes on subscription-based apps in its Play Store for devices running its Android software, in the latest concession to regulatory pressure challenging whether the company has overcharged developers.
In a blog post on Thursday, Google said it would reduce its commissions on subscriptions for apps that users pay through its Play Store to 15 percent. Currently, Google takes a 30 percent cut for the first year of subscriptions and then lowers the rate to 15 percent from the second year. Google will eliminate the two-step process starting in January and apply the lower fee from the beginning.
Google also said some eBooks and streaming music services would be eligible for fees as low as 10 percent. It was not immediately clear which services or books would qualify and how the exact percentage was set.
In March, Google cut its take on the first $1 million a company earned through the Play Store to 15 percent from 30 percent, in a move aimed at easing the financial burden for smaller developers. It came on the heels of a similar commission cut from Apple.
The latest Play Store changes reflect the whittling away of fees that Google and Apple have charged developers to push their software through their app stores. When Apple introduced the App Store in 2008, the company set its commission at 30 percent and Google soon followed with a similar fee structure.
But as companies built businesses based on apps running on smartphones and tablet computers, a growing number of developers began to question whether a 30 percent take was excessive and a byproduct of the lack of competition in the market for app stores.
Earlier this year, a group of 36 states and the District of Columbia sued Google, claiming that its app store abused its market power. Google is also fighting a lawsuit filed by Epic Games, the creator of the popular video game Fortnite, after the search giant removed the game maker’s app for circumventing its payment system and avoiding fees. Last week, Google filed a countersuit against Epic.