Google attempts to preempt regulation with Play Store commission reductions

Google attempts to preempt regulation with Play Store commission reductions

Google announced it’s lowering its commission on sales made through its Play Store from 30% to 15% for the first $1 million of developers’ earnings, likely an attempt to preemptively stave off antitrust regulatory efforts. The new rules will take effect on July 1 and will affect every app that makes sales through the Play Store.

Google’s commission change echoes a similar move by Apple, but takes things a step further by including all developers. Late last year, Apple announced it would reduce by half its 30% commission on purchases made through the App Store for developers earning less than $1 million annually from sales made on the platform. Apple still takes a 30% cut of the total earnings of developers who make more than $1 million.

While around 98% of apps on the App Store earn less than $1 million in annual revenues, 95% of Apple’s total App Store revenue is actually generated by fewer than 20,000 publishers who surpass that threshold. That means the majority of Apple’s App Store revenue stream is unaffected by the supposedly generous change. By contrast, Google’s decision to reduce its commission on the first $1 million earned by all publishers goes a step beyond Apple, and may face a more significant impact to its revenues.

Both Google and Apple’s commission changes come on the heels of growing antitrust complaints alleging marketplace manipulation. For the past two years, Spotify and Epic have spearheaded developer criticism of Apple’s App Store practices, resulting in investigations by both the European Commission and the UK’s competition regulator.

Meanwhile, Google faces a class-action lawsuit in the US over its Play Store practices and three state attorneys general are reportedly considering bringing an additional suit against Google for its Play Store fees. Not to be outdone, Epic also recently launched new complaints against Google in Australia.

However, these revised commission structures probably won’t diminish regulators' interests, since they still fundamentally shoehorn developers to use each company’s payment service. Though Google’s commission change will affect the sales of more developers than Apple’s, it will still take its 30% cut of most of the revenues earned by its most profitable publishers—including Epic, whose legal complaints are central to mounting antitrust concerns over the tech giants’ alleged app store duopoly.

In a statement to TechCrunch, an Epic spokesperson explained why Google’s commission change fails to grasp the root of the problem: “Whether it’s 15% or 30% ... developers are [still] forced to use Google’s in-app payment services. … Competition in payment processing and app distribution is the only path to a fair app marketplace.”