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Google Slashes India Fees, Intensifying Pressure on Apple

Google will next year cut in half the fees it collects from downloads on its Play Store in India, ratcheting up pressure on rival Apple to follow suit.


A Google logo is seen on an Apple Macbook in this image from April 2020. Photo: Dado Ruvic, Reuters.

Google’s move to slash the fees it collects from downloads in India on its Play Store is likely to increase pressure on Apple to follow suit.

Google will cut the service fee for all subscriptions on Google Play from January 1 next year to 15% from 30%, said vice president for product management, Sameer Samat, in an official blog. Apple charges a 30% fee for subscription services for the first year and 15% for each year thereafter but makes an exception for apps with revenue below $1 million, only taking a 15% cut.

It will ”put pressure on Apple to toe the line and slash its high commissions,” said Sijo Kuruvilla George, executive director of the Alliance of Digital India Foundation in New Delhi. “The whole app economy globally – barring China and Iran to some extent – is predominantly dominated by Google and Apple. Any policy change by a platform would put pressure on the other to follow suit. App users will expect it.”

‘Half-Hearted’ Move

Still,  George says Google didn’t go far enough. Google’s cuts are ”half-hearted,”  he said, because it continues to use a layered pricing system for subscription and renewals of apps, which ADIF says is “unfair and arbitrary.” And both the app heavyweights continue to force developers to adopt only their payment platforms, he says.

Both Google and Apple say that starting March 2022, the payment of all app downloads must be processed through their respective payment processing systems solely – and not through any third-party system like a credit card – ”giving rise to another type of anti-trust challenge,” George said.

• By Indrajit Basu

 

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Indrajit Basu

Indrajit Basu is an India-based correspondent for Asia Financial and wears two hats: journalist and researcher (equity). Before joining AF he reported on business, finance, technology, wealth management, and current affairs for China Daily, SCMP, UPI, India Today Group, Indian Express Group, and many more. He is also an award-winning researcher. If he didn't have to pay bills, he would be a wanderer.

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