Google cuts mobile app store fees in half amid scrutiny

SAN FRANCISCO: Google today said it will halve the controversial fee it charges developers for its online store for digital content designed for Android mobile devices.

The commission earned on Google Play will be reduced to 15% from 30% as of July, but only in the first million USD in revenue that the developer receives annually, according to Samir Samat, Vice President of Product Management.

The move comes amid pressure on Google and Apple to relax policies on their online markets for the dominant mobile platforms.

Apple announced a similar cut for small businesses last year.

“We believe this is a fair approach in line with Google’s broader mission to help all developers succeed,” Samat said of the smaller portion of Play Store transactions, and he estimates that 99% of developers will benefit from this reduction.

Apple and Google require developers to use their payment systems for transactions in their online stores for mobile applications, services, and digital goods, taking a portion of the transactions at 30% or less as a commission.

The tech giants behind competing mobile operating systems for iOS and Android maintain that the commission is an industry standard and fair compensation for running trustworthy online stores where developers can thrive.

The sting of the transactions has been heavily criticized, though, by developers like Epic Games, the maker of Fortnite, the music streaming service Spotify, and others who have unleashed legal challenges around the world.

An Epic spokesperson responded by saying that Google’s move failed to address the “root cause” of market dominance.

Whether 15% or 30%, for apps sourced through the Google Play Store, developers are forced to use Google’s in-app payment services. Epic’s statement said: “Android should be fully open to competition, with a level playing field. Oh really”.

Apple and Google also face growing opposition from other tech giants over their control of apps on their platforms.

Facebook and Spotify have claimed that Apple is acting in a non-competitive manner by setting rules on external developers, which do not apply to itself.

The tragedies prompted the strong competition authority in the European Union to open a series of cases against Apple in June, involving both its app store and the payment service Apple Pay.

Invoices filed in a few US states will prevent major app stores from using a specific payment system for transactions.

While the App Store is the only portal for digital content on Apple devices, users of Android smartphones or tablets can download apps from other services.

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