Subscription Service Fees Reduced from 30% to 15%
In-App Payment Fees Remain at 30%
[Asia Economy Reporter Kim Suhwan] Google has decided to cut the commission fees imposed on subscription services of applications (apps) registered on its app store, the Play Store, by half.
According to Bloomberg and CNBC on the 21st (local time), Google announced in a statement that starting January 1, 2022, Google Play Store will reduce the subscription commission fees for all apps from the existing 30% to 15%.
Previously, Google applied a 30% commission fee for the first year and 15% thereafter for subscription services of third-party apps.
Google expects that 99% of all app developers will benefit from this commission fee restructuring policy.
Additionally, Google announced plans to reduce the commission fees for media apps such as e-books, music streaming, and video apps to 10%. This discount will apply to media apps that support various Google services and record more than 100,000 active users monthly.
However, Google plans to maintain the existing 30% commission fee for general in-app purchases that are not subscription-based services.
Therefore, game apps without subscription services are expected to receive little benefit.
Major news media apps, Netflix, and Microsoft Office, among other media and productivity-related apps, mainly offer subscription services.
On the other hand, games, which are the largest source of revenue for the Google Play Store, mostly do not have subscription services and use in-app purchases (payment made per transaction within the app).
Previously, Google and Apple have been criticized for abusing their monopolistic positions in their app ecosystems by charging excessive fees to app developers.
Apple, like Google, charges a 30% commission fee for the first year on all subscription services.
As controversy over the excessive fees charged by Google and Apple intensifies, antitrust lawsuits are underway in the United States.
In July, prosecutors from 36 states in the U.S. filed an antitrust lawsuit against Google.
Epic Games, a major U.S. game company famous for 'Fortnite,' is suing Apple for antitrust violations, and the U.S. political sphere has also introduced bills to limit app fees one after another.
Recently, both the Democratic and Republican parties reached a bipartisan agreement to introduce the 'Open App Markets Act,' which allows app developers to use various payment methods to avoid platform companies' commission fees.
In addition, South Korea passed the 'Google Gapjil Prevention Act,' becoming the first in the world to prohibit platform companies like Google from forcing a specific payment method for in-app purchases.
Meanwhile, immediately after Google's announcement on the day, the stock prices of major app companies rose.
The stock price of Match Group, the parent company of the popular dating app Tinder, rose by up to 11%, and Spotify, the world's largest music streaming app, increased by 4.7%.
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