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Google cuts subscription-based service fees for Play Store apps in half

Apps that make their money via subscriptions will no longer need to retain customers for a year in order to see service fees drop from 30% to 15%.

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Effective Jan. 1, Google is decreasing the service fee it collects from subscription-based apps in the Play Store from 30% to 15%, the company announced Thursday via its blog for Android developers. The new rate will be effective for all apps on day one, the announcement reads -- that's a change from the current structure, which requires subscription-based apps to retain their customers for a year in order to enjoy a lower rate.

"Our current service fee drops from 30% to 15% after 12 months of a recurring subscription," Google's blog notes. "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 goes on to highlight key developers sharing support for the change, including Bumble founder and CEO Whitney Wolfe Herd and Duolingo co-founder and CEO Luis von Ahn.

"We're excited to see Google continuing to collaborate with the ecosystem to find models that work for both the developer and platform," von Ahn said.

The move comes amid mounting worldwide scrutiny of Google's and Apple's respective app store guidelines, as well as legal challenges like the ones launched against Apple and Google by Fortnite developer Epic Games. In September, a judge largely dismissed Epic's claims against Apple, but the fight is ongoing, including a separate Epic lawsuit against Google that argues that the company engaged in anti-competitive practices related to app distribution and app-related payments. In August, a bipartisan group of Senators introduced a bill that would bar companies from imposing their payment systems on developers and ensure that developers could tell customers about lower pricing on other platforms.

In addition to scaling back its subscription-based service fees, Google also announced a reduction in service fees for e-books and music streaming services. Some developers will be eligible for rates of 10%, which is down from 15% and intended to, "recognize industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent," Google writes.

Google adds to expect additional updates on its efforts to work with developers at the Android Developer Summit on Oct. 27-28.