Google will cut the service fee it charges developers on its app store by half on the first $1 million they earn in revenue in a year, after a similar move by rival Apple last year.
Both the companies have come under fire from notable players such as Microsoft, Spotify Technology, as well as start-ups and SME’s, that allege the fees deprive consumers of choices and push up app prices.
Google recently mentioned in a blog post that it would cut app store fees to 15% from 30% effective July 1, a move that would impact most of the developers on its app store.
In contrast, Apple said in November it planned to lower its commissions only for developers who make $1 million 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% or 30%, for apps obtained through the Google Play Store, developers are forced to use Google’s in-app payment services,” Epic said.
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 — or about 5% of the $11.6 billion it earned from Google Play last year — had the service fee cut come into effect in 2020.
The team at Platform Executive hope you have enjoyed this news article. Translation from English to a growing list of other languages via Google Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Chavi Mehta and Subrat Patnaik in Bengaluru. Additional reporting by Praveen Paramasivam. Editing by Anil D’Silva, Aditya Soni and Shinjini Ganguli.
Stay on top of all the latest developments across the platform economy and gain access to our problem-solving tools, proprietary databases and content sets by becoming a member of our community. For a limited time, subscription plans start from just $7 per month.