Google will reduce its app store fees for all subscription-related apps from day one to a maximum of 15% instead of the current 30%, the company announced on Thursday amid increasing regulatory scrutiny of its app store practices and Apple.
For e-books and on-demand music streaming services such as Spotify, Google is cutting its commission to “up to 10%,” the company announced. If you are currently signing up for a Spotify subscription from within the app, users will be directed to Spotify’s website to complete the transaction in order to bypass the commission.
These changes will take effect next January.
Google says it is making these changes for e-books and streaming music apps because “content cost is the bulk of revenue” and that awards “recognize the industry economics of media content verticals.”
However, the change is also coming amid increasing regulatory scrutiny on a global scale in Google’s app store practices.
Google’s announcement is expected to put pressure on Apple, which, like Google, has been widely criticized 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 recurring subscription. With the latest announcement, the company charges a 15% commission from day one.
Google already has a policy that the first million dollars a developer makes through Google requires a 15% cut.
Earlier this month, the startup organization Alliance of Digital India Foundation touched India’s competition regulator is seeking temporary exemption from Google’s guidelines on collecting commissions for payments made for apps in its Play Store pending an ongoing antitrust investigation against the big tech giant.
India’s Competition Commission has also reportedly found that Google is abusing its dominance in the Android phone market.
Please note that this policy change only applies to subscription-based apps, not to game apps. On that front, Google is currently in a legal battle with Epic Games, the maker of Fortnite, over its in-app payment mechanism.
Google’s announcement also comes just a week before its annual developer summit.