Google cuts Play Store fees for subscription apps

Technology giant Google on Thursday said it will lower the fee that the company charges developers for subscription-based apps on Play Store from 30 percent to 15 percent, starting January 1, 2022.

The move came after it faced criticism from large firms such as Microsoft Corp, Spotify Technology SA, as well as startups and smaller companies. They alleged that the fees deprive consumers of choices and push up app prices.

Currently, developers pay a 30 percent subscription fee in the first year, and 15 percent in the subsequent years.

“Our current service fee drops from 30 percent to 15 percent after 12 months of a recurring subscription. But we’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can,” Google said in a statement.

“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 percent to 15 percent, starting from day one.”

For developers offering subscriptions, this means that first-year subscription fees will be cut in half.

Whitney Wolfe Herd, founder and CEO of Bumble Inc, said, “Our partnership with Google has been a powerful one for our business, helping us to scale and ultimately playing a key role in advancing our mission to empower women globally. The pricing change they’ve announced will allow us to better invest in our products and further empower users to confidently connect online.”

Earlier this year, the company had launched Play Media Experience programme to encourage video, audio and book developers to help grow Android platform by building cross-device experiences. This helped developers invest in these multi-screen experiences with a service fee as low as 15 percent, Google said.

E-book companies and on-demand music streaming services, which use most of their sales to pay for content costs, will now be eligible for a service fee as low as 10 percent.

Earlier in March, Google said it will reduce the service fee it charges developers on its app store by half, a move similar to iPhone maker Apple Inc.