Google cuts app store fees on the first million in annual sales

Google CEO Sundar Pichai speaks during a conference in Brussels on January 20, 2020.

Kenzo Tribouillard | AFP | fake images

Google announced Tuesday that it will reduce fees for the Google Play app store to 15% on the first million dollars a developer makes on the Google store per year.

After developers exceed the $ 1 million mark in sales for one year, Google will charge developers its standard 30% fee for in-app purchases and downloads.

The move follows a similar decision by Apple in December, although Apple’s program only applies to developers who make less than $ 1 million per year on Apple’s App Store.

The change will address some of the developer complaints about app stores and their fees, which have come under scrutiny by regulators over their control of smartphone operating systems and the price they charge developers. Google says it will share more details before the program that begins July 1.

The Google program offers a 15% fee reduction on the first million dollars to all developers, even those who earn millions of dollars.

“With this change, 99% of developers globally who sell digital goods and services with Play will see a 50% reduction in fees,” Google Vice President Sameer Samat said in a blog post. “These are funds that can help developers scale through a critical phase of their growth by hiring more engineers, adding their marketing staff, increasing server capacity, and more.”

While Google hasn’t faced as much scrutiny over its Google Play platform as Apple’s App Store because it’s just one of many app stores for Android devices, it still faces challenges from developers and scrutiny from regulators and lawmakers who say it has. too much power over the Android app market.

Epic Games is suing Google after the company removed Fortnite from the Google Play store and accused Google of monopolizing app payments. Epic Games said in its lawsuit that it offered Fortnite outside of the Google Play app store, through a manual installation process known as a side-download, but Google makes downloaded apps work at a disadvantage.

“While a reduction in the Google applications tax may alleviate a small part of the financial burden that developers have been bearing, this does not address the root of the problem,” a representative for Epic Games said in a statement. “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.”

Google is also facing state legislatures in the US proposing bills that would regulate the Google and Apple app stores.

Google would have been affected by a failed North Dakota bill that would have required app stores to allow software developers to use their own payment processing software and avoid fees charged by Apple and Google.

A similar bill passed the Arizona House of Representatives last week and is still waiting to be debated by the state Senate.


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