Google Play Store to Reduce Fees for Android Developers
The reduction will take effect from July this year as the company and Apple face legal action from Epic Games
Google has announced in a blog post yesterday that it will be cutting fees for Android App Developers in the Google Play Store from the 1st of July, the amount taken will be cut by half from 30% to just 15%, for the first $1m (£720,000) in sales each year of the apps and any digital goods and services sold within them. The move is similar to that seen by Apple in November last year, as both companies have been facing legal challenges of growing interest to developers, a game developer Epic, has been vocal in calling out the "exorbitant" fees that both Apple and Google charge to developers using their platform. Regulators are investigating both Apple and Google due to claims of anti-competitive practise, although claims against the Google Play Store's operations are different to those against Apple as the former actually allows for rival stores to work on its mobile platform, as well as making it easier focusers to install software by other means, but like Apple, the Play store is default on most android phones.
Google’s vice president of product management, Sameer Samat, said that this reduction in fees will mean 99% of developers globally will see a 50% reduction in fees charged by the Play Store. “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,” said Samat. While the fee does return to 30% after the first $1m of revenue, Samat said applying this rate to all app developers, not just the developers making less than $1m per year was a “fair approach”. The difference is that Google's 15% rate will apply to the first $1m of sales a developer makes each year regardless of their total earnings, with the remainder subject to the 30% fee, whereas Apple only offers the 15% rate if a developer's net sales fall below $1m, and as soon as the developer surpasses that limit, all earnings are subject to the higher charge.
Epic Games still states that they believe Google’s new policies do not do enough for the stakeholders or the industry, in response too the announcement a spokes person for Epic Games said the reduction might “alleviate a small part of the financial burden developers have been shouldering” but went on to say that the the new measure “does not address the root of the issue,” and going further to argue that “Android needs to be fully open to competition, with a genuinely level playing field among platform companies, app creators, and service providers. Competition in payment processing and app distribution is the only path to a fair app marketplace.”
"It's scary for the tech industry to that see Google and Apple aligning their monopolistic policies in near lock-step. In a free app market, rates would be much lower for all due to competition, and not subject to their divide-and-conquer tactics" - Tim Sweeney, CEO, Epic Games
“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. Android needs to be fully open to competition, with a genuinely level playing field among platform companies, app creators, and service providers,” an Epic Games spokesperson said.
Epic Games has also been prominent in legal battles over the attempts made by Google and Apple to 'avoid giving the stores a cut of mobile Fortnite revenues', which ended in both companies removing the games from their app stores, following Apple in its bid to remove the game, Googles statement said "While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play". Both companies have been fight pushback in numerous forms over their revenue cuts, beyond international legal battles, Google, Apple and other tech giants were found in October last year by the US House of Representatives antitrust committee to have been engaging in monopolistic behaviour. An alternate bill in Arizona mandated that app stores should have to allow developers to use alternative payment systems has passed the state House of Representatives and is before the state Senate.
The tech industry, and especially apps and mobile development, are fast growing, and play a key role in the infrastructure of the global, and digital economy, although it is currently dominated by two giants that subsequently control most aspects of usage by developers and users. In most other industries, a duopoly of this extent is almost unheard of, and would be managed with strict policy and regulation, but international governments are responding to uproar by imposing restrictions and adapting their approach to control fast moving tech industries such as mobile apps. These regulations are a part of a larger "big tech crackdown" that is gaining momentum through pressure from the public and from developers, in order to strike a better deal for the greater few.
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