Google Slashes Service Fee By 10%

Google has slashed the commission for in-app subscriptions to 15% effective January 1 under mounting pressure from developers in India, its largest market in terms of user base, who have asked the company to allow other payment mechanisms for purchases by customers.

“Digital subscriptions have become one of the fastest growing models for developers but we know that subscription businesses face specific challenges in customer acquisition and retention. We’ve worked with our partners in dating, fitness, education and other sectors to understand the nuances of their businesses,” Sameer Samat, vice president of Product Management for Google Play, wrote in a blog post.

“To help support the specific needs of developers offering subscriptions, starting on January 1, 2022, we’re decreasing the service fee for all subscriptions on Google Play from 30% to 15%, starting from day one,” he wrote.

Google also said that it is reducing service fee to 10% in the media experience programme in categories such as ebooks and on-demand music streaming services, where customers spend for subscription every month.

“Ebooks and on-demand music streaming services, where content costs account for the majority of sales, will now be eligible for a service fee as low as 10%. The new rates recognize industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent. You can go here for more information,” Samat wrote in the blog late on Thursday evening.

Indian internet entrepreneurs have been up in arms against both Google and Apple over the in-app commission charged by the two technology giants, saying they do not allow other payment mechanisms that charge low to nil commissions to be used thereby harming their business.

The Alliance of Digital India Foundation (ADIF) had earlier this month filed a petition before the Competition Commission of India (CCI) seeking interim relief from Google’s new Play Store policy which goes into effect from March 2022.