Google cuts in-app commissions by half after backlash from developers
After Google’s decision to introduce the 30-percent commission for all in-app purchases with a mandate to use Google’s in-house payment system from January 2021, an unrelenting response wave from developers, tech firms, and politicians was triggered. This forced Google to delay the billing policy implementation till September. Now they have been forced to cut the 30-percent commission rate for in-app purchases to 15-percent for the major chunk of app developers using the platform.
The decision for the 30-percent commission was heavily weighted in Google’s favor. Now Google Korea has reported to the parliament’s committee for science and technology that they are going to implement a 15-percent commission for developers whose annual sales are less than $1 million, and over that, the commission rate is 30-percent from July.
As per a news agency, Yonhap, only 1-percent of app developers ever cross that sales threshold, and 99-percent lie below the $1 million mark. So, effectively Google is going to only charge a higher commission from a small chunk of developers that are making big money using the platform.
According to Google, the revised service fee is critical for reinvesting in the platform in the long run, but it in a way contradicts the lawmakers proposed bills to ban app market platforms from forcing users and developers to only use certain payment methods for mobile content transaction. Google officially said that “We will do our best so that South Korean developers can provide their products and services to over 1 billion users from some 300 countries around the world.”
Apparently, Google Play Store managed to cross the 5 trillion Won (approximately $4.4 billion) in sales – that’s more than Korea’s mobile app sales in September and October in the last year. This vital information comes courtesy a government report that analyzed 246 companies.
