Google will cut its app store charges for all subscription-based apps to a maximum of 15% from day one instead of the current 30%. The company declared on Thursday amid rising regulatory analysis of its and Apple’s app store practices. For e-books and on-demand music streaming services like Spotify, Google is cutting its commission to “as low as 10%”, the organisation said. Currently signing up for a Spotify subscription from within the app guides users to Spotify’s website to take out the transaction to bypass the commission.
These modifications will come into effect in January 2022. Google states that it is doing these changes for ebooks and music running apps since “content costs account for the majority of sales” and that the rates “recognise industry economics of media content verticals.”
However, the change also occurs amid growing regulatory scrutiny in Google’s app store practices globally. Google’s announcement is expected to mount pressure on Apple, which, like Google, has widely been criticised for charging a 30% commission on all in-app purchases.
So far, Google’s commission has dropped from 30% to 15% after 12 months of a recurring subscription. With the latest release, the company will charge 15% commission beginning from day one. Google already has a policy where the first million dollars a developer earns through Google requires a 15% cut.
Beginning this month, the startup body Alliance of Digital India Foundation had moved India’s competition watchdog seeking interim aid from Google’s policy on collecting a commission on payments made on apps on its play store, until a continuing antitrust investigation into the big tech giant was completed.
The Competition Commission of India has reportedly also found Google abusing its dominance in the Android phone market.
One thing to note here is that this policy change applies only to subscription-based apps but not to gaming apps. On that front, Google is currently clasped in a legal battle with Epic Games, the creator of Fortnite, over its in-app payments mechanism.
Google’s statement also comes just a week before its annual developer summit.
