Sundar Pichai, Google testifies at the congressional hearing on March 25, 2021.
Google said Thursday that it is cutting service fees on its app store after a similar move Appleas both companies face pressure from lawmakers and regulators to make their mobile stores more accessible to developers.
The service fee for subscriptions in the Google Play Store will drop from 30% to 15% from day one, Google said in a press release. Under the current model, developers have to cut 30% of their subscriptions to Google in the first 12 months before the commission drops to 15%.
According to Google, 99% of developers would qualify for the lower service fee.
The company also announced on Thursday that it is rolling out a program that will allow e-books, music streaming services, and other apps that pay for content to have access fees as low as 10%. Apple makes no exceptions for these types of apps and doesn’t offer developers a 10% fee in its app store.
Apple, which has received more regulatory attention than Google in its App Store, has slashed its revenue from 30% to 15% in many cases over the past two years, including apps that cost less than $ 1 million a year Earn news apps and certain premium apps video streamers that participate in an Apple program. But Apple still charges 30% for the first year of a subscription, which means that Google’s App Store may be more competitive for subscription-based apps.
Both Google and Apple have faced legal action over their app store practices. In July, Attorney General announced an antitrust lawsuit against Google, claiming the company abused its power over app developers through its Play Store on Android. And Fortnite maker Epic Games has filed a major lawsuit against Apple and Google that focused on their app store fees and other practices.
Legislators have proposed a number of bills that could force Apple and Google to change their app store guidelines even more effectively. the Open App Markets Act, for example, is a bipartisan bill that would force corporate app stores to allow developers to use other payment systems, which could potentially help them opt out of standard service charges.
It would also prevent the platforms from preventing app manufacturers from communicating directly with their users about “legitimate business offers” or from penalizing them for using different pricing conditions elsewhere.
Another bipartisan bill that American Innovation and Choice Online Act, would prohibit the platforms from using their gatekeeper authority to discriminate against users or companies such as app makers who rely on their services, for example for distribution on mobile phones.