Google lowers app fee for subscriptions to 15 percent

style="float: right; margin-bottom: 10px; font-weight: 600;"Fri 22nd Oct, 2021

Following pressure from software developers and politicians, Google is lowering the levy for subscriptions concluded via the group's app platform. Previously, app developers initially had to cede 30 percent of the subscription price to Google; after a year, the levy dropped to 15 percent. Now it will be 15 percent from the start, Google announced Thursday.Google explained the move by saying that developers had heard that it was difficult for them to reach the 15 percent mark because some customers cancelled their subscriptions beforehand. The change is to take effect on January 1 of next year.

Google went even further and announced that for some e-book providers and music streaming services, the levy could even drop to as low as ten percent. There was initially no statement from Apple on Google's plans. In Apple's App Store, subscriptions are currently also subject to an initial 30 percent charge and 15 percent after one year.

Google is behind the Android smartphone operating system, which has a market share of over 80 percent. Apple fills virtually the entire rest of the market with its iPhones. On Android smartphones, it is true that apps can be downloaded not only from Google's Play Store. But users mostly fall back on the preinstalled Google platform. On iPhones, apps can only be downloaded from the in-house App Store.

In recent years, various app developers had complained that the levies on both platforms were too high. Politicians and competition regulators in both Europe and the U.S. are taking aim at the app store system.Large streaming services like Netflix and Spotify, for example, do not even sell their subscriptions via Apple's App Store, but via their own website in order to avoid the levy. Spotify also criticizes that it is unfair that Apple, as the platform operator, does not have to pay a subscription fee for its music service because it goes into its own pocket anyway.

When it comes to app sales or other in-app deals, Apple and Google have been willing to charge developers only a 15 percent levy since last year if their revenues are less than $1 million.Apple had generally set the levy at 30 percent when it introduced the App Store on the iPhone in 2008. Company founder Steve Jobs said at the time that Apple only wanted to cover the costs of operating the platform. The value was in line with the practices in the games industry, and Google also followed suit with its app platform.However, with the dramatic growth in smartphone usage, app stores have now become a billion-dollar business. The reduced subscription fee of 15 percent after the first year was introduced several years ago.Apple emphasizes that the group is entitled to a commission as a platform operator. This position was also recently confirmed by a judge in California in proceedings concerning the app store rules.

Photo by Pawel Czerwinski


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