Technology

After a tussle with Indian developers, Google cuts Play Store fees


The pushback from India made Google re-evaluate its plans to mandate new Play Store rules in its second-largest internet market.

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Google does an Apple, but almost after four months. The search giant has halved Play Store commission to 15% for app makers selling their digital products on its marketplace. The revised fees will be applicable on the first $1 million revenue earned each year for all Play developer.

This means that developers outside $1 million threshold will pay Google the usual 30% fees for all in-app purchases during that year. According to the search giant, app makers outside this revenue zone are on “self-sustaining orbit”.

“We are reducing the service fee Google Play receives when a developer sells digital goods or services to 15% for the first $1M of revenue every developer earns each year,” said Sameer Samat, VP, Product Management at Google.

Google estimates that over 97% of the apps globally do not sell digital goods, and consequently don’t pay any commission. So, the revision in fees will have an impact on the remaining developers who sell products or services.

In November, Apple decided to halve its App Store commission after facing backlash from several of its top developers. The company even pulled out the hugely-popular Fortnite by Epic Games from its marketplace citing policy violation. The game developer had offered a discounted price on its virtual currency for purchase outside the App Store.

Before its removal from the App Store, Fortnite was paying 30% to the iPhone maker for all in-app purchases. Epic Games had said the fees was “unfair”.

India moment

Google, for its part, has been facing pressure from developers in India, led by PaytM’s founder Vijay Sharma. The tussle gained force after Google pulled out one of PaytM’s apps just prior last year’s IPL tournament. The search giant said the app violated its gambling code, and later reinstated it.

Also Read | Paytm back on Play Store after Google rap

But, that did not deter PaytM’s Sharma from gathering a group of 150 smaller developers to counter Google’s dominance with a home-grown mini app store. The start-up alliance’s main ask was cutting Play Store’s commission fees.

In October, PaytM launched a mini app store, hosting over 300 apps, including sports retailer Decathlon, Domino’s Pizza and Ola.

The pushback from India made Google re-evaluate its plans to mandate new Play Store rules in its second-largest internet market. So, the search giant said it will implement new marketplace rules in September globally, but in India, it will defer enforcement to April 2022.

Also Read | Google ‘arm twisted’ us to remove a UPI cashback scheme: Paytm

Against this backdrop Google is revising its commission. And for developers to get the benefit of this change, they will need to share some “basic information” with Google so the company can understand associated accounts. Also, developers will need to set up their billing system with Play for the search giant to apply the new rate.

For developers in India, Google reiterated that digital goods sellers on its platform have time until March 2022 to comply with its Play billing set up. For those using Play for payment transactions, the new rate will kick in from July onwards.

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