From January 1, 2022, Google will reduce its app store fees for all subscription-based services to 15%, down from 30%.
Nothing happens all of a sudden, Google app store policies have been criticized for various reasons for a long time.
Google To Reduce Play Store Fee
The subscription services have a charge and at present Google charges a 30% fee. The charges drop to 15% after 12 months of recurring subscription.
“We’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can”
Sameer Samat, Vice President, Product Management, Google in a blog post.
Google said that ebooks and on-demand music streaming services, where “content costs account for the majority of sales”, will be eligible for a further decrease in its service fee, which “can be as low as 10 per cent”.
“The new rates recognize industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent,” Samat said.
“We will continue to engage with developers to understand their challenges and opportunities — and how we can best support them in building sustainable businesses,” said Samat.
Unfair Policy-The Reason For Backlash?
While there was a charge of 30% commission for apps selling digital products on their app stores, the company said in October of last year that it would begin enforcing this commission more aggressively starting September 30, 2021.
It went on to say that the move is only likely to affect about 3% of apps on the Play Store that doesn’t already use the company’s billing system.
After this, there was a backlashnot only from Indians but from all parts of the world, and thus Google delayed the implementation to March 2022.
Announcing the reduction of its commission rate to 15% for the first $1 million revenue developers earn using the Play billing system every year in March 2021, which came into effect in July 2021.
The Competition Commission of India (CCI) is now investigating Google for its mandatory usage of the Google Play Store’s payment system for paid apps and in-app purchases.
The commission believes that such a limitation is unreasonable because it inhibits app developers’ options to choose their preferred payment processing system.
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