Google will lower the cut it takes from subscriptions on the Google Play Store to 15 percent “starting from day one.”
The change marks a significant shift for the company, which previously charged a 30 percent cut of subscription revenue in the first 12 months before dropping to 15 percent for subscriptions that continue beyond that point. The change will come into effect starting January 1st, 2022.
Additionally, Google said it would change the service fee in the ‘Media Experience program,’ which will see the fee drop as low as 10 percent for ebooks and on-demand music streaming services.
However, Bloomberg’s Mark Gurman pointed out on Twitter that the change doesn’t apply to in-app purchases, such as for digital goods sold in games.
Google is lowering its cut from all subscriptions on Google Play to 15% from 30% — from day 1. The reduction previously only took effect on the first $1 million in revenue and for users who subscribed longer than a year. Change doesn't apply to in-app-purchases (games) however.
— Mark Gurman (@markgurman) October 21, 2021
While the change is overall good, it’s also worth keeping in mind the likely catalyst. Google positions the change as addressing “developer needs,” but it comes as Google faces down antitrust lawsuits over its Play Store practices.
Just this year alone, lawsuits have accused Google of illegally trying to control Android app distribution, paying developers to keep them on the Play Store and attempting to keep Netflix using in-app purchases by offering the company a special deal. Google also reportedly considered purchasing Epic Games to make the “contagion” of distributing apps outside the Play Store go away. While Google says the change is to help developers, it may also be an effort to avoid scrutiny over its Play Store practices.
It’s also worth noting Apple has been dealing with antitrust allegations over its App Store in recent months as well. The Epic Games vs. Apple lawsuit resulted in Apple being required to allow developers to use other payment processing systems if they wish. A similar ruling in another lawsuit saw Apple allow developers to use email to offer alternate payment methods to customers.
Both Apple and Google previously rolled out new rules that reduced the cut each company took from 30 percent to 15 percent for developers who made less than $1 million USD. The move was criticized both for poor implementation and for being an attempt to stave off regulator scrutiny.