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Google cuts app store fees for developers to the first million in annual revenue

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Google CEO Sundar Pichai speaks during a conference in Brussels on January 20, 2020.

Kenzo Tribouillard | AFP | Getty Images

Google announced Tuesday that it would cut fees for the Google Play App Store to 15% from the first million dollars a developer makes per year on the Google Store.

After developers crossed the $ 1 million mark for a year, Google charges developers the standard 30% fee for in-app purchases and downloads.

The move follows a similar decision by Apple in December, although Apple’s program only applies to developers who earn less than $ 1 million a year on the Apple App Store.

The change will address some of the developer complaints regarding app stores and their fees that have been examined by regulators regarding their control over smartphone operating systems and the price they charge developers. Google announces that it will release more details ahead of the program starting July 1.

The Google program offers all developers, including those who make millions of dollars, a 15% fee reduction on the first $ 1 million.

“With this change, 99% of developers worldwide who sell digital goods and services with Play will achieve a 50% fee reduction,” said Google Vice President Sameer Samat in a blog post. “These funds will allow developers to scale at a critical stage in their growth by hiring more engineers, expanding their marketing staff, increasing server capacity, and more.”

Although Google hasn’t scrutinized its Google Play platform as closely as Apple’s App Store because it’s just 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 in the market for Android apps.

Epic Games is suing Google after the company removed Fortnite from the Google Play Store and accused Google of monopolizing app payments. Epic Games stated in its lawsuit that it offered Fortnite outside of the Google Play App Store through a manual installation process known as a sideload. However, Google penalizes sideloading apps.

“While lowering the Google App Tax can reduce a small portion of the financial burden developers have taken on, it does not address the root of the problem,” a representative from Epic Games said in a statement. “Regardless of whether it is 15% or 30%, developers must use Google’s in-app payment services for apps obtained through the Google Play Store.”

Google is also facing government legislation in the US that is proposing bills to regulate Google and Apple’s app stores.

Google would have been hit by a failed invoice in North Dakota that required app stores to allow software developers to use their own payment processing software and avoid fees from Apple and Google.

A similar bill was passed at Arizona House last week and is waiting to be discussed by the Senate.

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Katherine Clark