Google slashes Play Store fee to 15% on developers’ first $1mn in sales

By Amirtha P S, Desk Reporter
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The American technology giant Google will be halving the service fees it takes from the developers on the first $1 million they earn in revenue in a year, following a similar move by rival Apple last year.

Google has stated that it is reducing the fees to 15 percent from early 30 percent for the first $1 million in revenue on sales of apps and in-app-purchases each year. After reaching the earnings up to $1 million the developers will have to pay the typical 30 percent fee. The move will come into effect from this year July.

The scheme differs from that of Apple, which in November revealed its plan to lower its commissions only for developers who make $1 million or less in proceeds in a year from its app store.

Both Apple and Google have come under pressure from large firms like Microsoft, Spotify, as well as startups and smaller companies, that allege the fees deprive consumers of choices and push up app prices.

The Fortnite creator Epic Games said in a statement that Google’s move only relieves some of the financial burdens of developers. “Whether it’s 15 percent or 30 percent, for apps obtained through the Google Play Store, developers are forced to use Google’s in-app payment services,” the developer added.

Epic has been in a dispute with Apple since last year 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 forced 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 percent of the $11.6 billion it earned from Google Play last year if the service fee cut came into effect in 2020.

In order to get the benefit of the new Google program, developers must enroll in it, but after that, it will get renewed automatically each year. The company said that these savings can help developers to hire more engineers and further invest in their app development businesses. However, the changes will also help Google to avoid antitrust scrutiny from regulators.

Related: Epic Games drag Apple to EU antitrust regulators over App Store dispute