Google CEO Sundar Pichai speaks during a conference in Brussels on January 20, 2020.
Kenzo Tribouillard | AFP | Getty Images
After developers cross the $1 million mark in sales for a year, Google will charge developers its standard 30% fee for in-app purchases and downloads.
The change will address some of the developer complaints around app stores and their fees, which have come under scrutiny from regulators over their control of smartphone operating systems and the price they charge developers. Google says it will share more details ahead of the program starting on July 1.
Google’s program offers a fee reduction to 15% on the first $1 million to all developers, even those making millions of dollars.
“With this change, 99% of developers globally that sell digital goods and services with Play will see a 50% reduction in fees,” Google VP Sameer Samat said in a blog post. “These are funds that can help developers scale up at a critical phase of their growth by hiring more engineers, adding to their marketing staff, increasing server capacity, and more.”
While Google has not faced as much scrutiny over its Google Play platform as Apple’s App Store because it’s only one of many app stores for Android devices, it is still facing challenges from developers and scrutiny from regulators and lawmakers who say it has too much power over the market for Android apps.
Epic Games is suing Google after the company removed Fortnite from the Google Play store, and has accused Google of monopolizing app payments. Epic Games said in its lawsuit that it offered Fortnite outside of the Google Play app store, through a manual installation process known as sideloading, but Google makes sideloaded apps operate at a disadvantage.
“While a reduction in the Google app tax may alleviate a small part of the financial burden developers have been shouldering, this does not address the root of the issue,” an Epic Games representative said in a statement. “Whether it’s 15% or 30%, for apps obtained through the Google Play Store, developers are forced to use Google’s in-app payment services.”
Google is also facing state legislatures in the U.S. that are proposing bills that would regulate Google and Apple’s app stores.
Google would have been affected by a failed North Dakota bill that would have required app stores to enable software developers to use their own payment processing software and avoid fees charged by Apple and Google.
A similar bill passed the Arizona House last week and is still waiting to be debated by the state Senate.