Google is cutting in half its commission on developers’ first $1
million in app sales, following a similar move by Apple that is aimed at
appeasing developers and regulators who accuse the companies of abusing their
dominance of the smartphone industry.
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Google said that starting July 1, it would take 15 percent of the
first $1 million developers take in from certain app sales, down from 30 percent.
Google will still charge 30 percent after the first $1 million.
Apple last year said it was halving its App Store commission to
15 percent on companies that earn less than $1 million a year in app sales.
The dual actions reverse years of resistance by the companies to
change their app commissions, which have become important to their growth.
Rivals have intensified their criticism of the rates, saying
they are artificially high because the companies have a duopoly on the
distribution of mobile apps. Regulators around the world have begun
investigating the commissions as part of larger antitrust probes, and lawmakers
in several states are considering bills that would make it more difficult for Apple
and Google to impose the fees.
Apple has been largely the focus of the criticism because it
forces developers to use its App Store to reach iPhone users. Google’s Android
software allows users to download apps outside of its flagship Play Store.
Still, Android is the dominant smartphone operating system around the world,
underpinning roughly 85 percent of the world’s smartphones, according to International
Data Corporation (IDC), a market research firm.
Google said its change would halve the fees for 99 percent of
Android developers. But while Apple’s and Google’s moves have earned them
positive headlines, they will likely have little impact on the companies’
bottom lines, because most of their app revenues come from larger developers.
Apple’s new policy, for instance, will affect roughly 98 percent
of the companies that pay Apple a commission, but those developers accounted
for less than 5 percent of App Store revenues last year, according to estimates
from Sensor Tower, an app analytics firm.
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