Internet giant Google has slashed the commission it charges from developers on Play Store by half following widespread opposition.
The company has decided to reduce the commission to 15% from 30% for the first $1 million a developer makes in a year from sale of digital goods or services on the Play Store.
The move will help 90% of the developers globally, who sell digital goods and services on Play Store, save 50% of the fees they pay to Google, the company said in a blog post.
“Starting on July 1, 2021 we are reducing the service fee Google Play receives when a developer sells digital goods or services to 15% for the first $1M (USD) of revenue every developer earns each year…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,” the blog posted by Sameer Samat, vice president, Android and Google Play, said.
“We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed,” he added.
The Alphabet-owned company was met with widespread backlash when it announced in September last year that all apps on Google Play involved in in-app purchase of digital goods will mandatorily be required to use Google Play’s billing system. The opposition was particularly strong in markets like India where startup founders approached regulators and courts against the move. In fact, the country’s antitrust regulator – the Competition Commission of India (CCI) – has taken cognizance of the app store commission among other concerns.
The company later deferred the deadline for developers in India to integrate with Play billing system to March 31, 2022.
“Last year when we clarified the requirements of Google Play’s Payments policy, we explained that the service fee for Google Play is only applicable to developers who offer in-app sale of digital goods and services. More than 97% of apps globally do not sell digital goods, and therefore do not pay any service fee,” the company said in the latest blog post.
The billing system will be applicable to any developer charging for apps and downloads on Google Play. It also covers subscription services such as fitness, education, ad-free versions of app; purchase of cloud services and software; and in-app purchases including digital goods like virtual currencies or extra lives on games. For the next 12 months, it was exempted business entities that were forced to move their classes or events online due to the pandemic from the integration requirement. However, purchase of physical goods and services, remittances and peer to peer transactions are not covered under this exception.
The move also follows a similar decision by Apple in November last year. The iPhone maker had brought down App Store fees to 15% from 30% for smaller developers who earn less than $1 million per annum in app revenue and in-app purchases.
“As a platform we do not succeed unless our partners succeed. Android and Google Play have always listened to our developer partners from around the world and we continue to take their input into account as we build and run the ecosystem,” Google said in its blog.