Google to lower app store commission in South Korea after backlash from developers

Google had earlier announced it would charge 30% commission on all in-app purchases. The company has now reduced the commission after backlash from local developers.

Google will lower its planned commission rate for app developers REUTERS/Toby Melville/File Photo (REUTERS)

Google is rolling back its planned Play Store commission expansion in South Korea, according to a Yonhap report. The move comes after a backlash from the local software makers over the steep Play Store cut.

According to the report, Google would now take a 15% cut on in-app purchases to developers with annual sales up to $1 million. The company would charge a 30% commission from developers with more than $1 million annual sales. Google's revised Play Store policy will come into effect in July this year.

Google's decision is likely to benefit the maximum app developers in South Korea. The report noted that 99% of developers have less than $1 million annual sales from the Play Store.

Earlier, Google had announced that it would levy a 30% commission on all in-app purchases through the Play Store. It also made it mandatory for developers to use their own payment system for app purchases. As expected, local developers were not pleased with the decision.

Following Google's announcement, the local app market ONE Store had reported growth in traction. ONE Store is also a subsidiary of the local carrier SK Telecom Co. The local app store is already wooing local developers with discounted commissions.

Google and Apple have drawn wide criticism over the commissions charged on the apps on their app store. The two firms together have the largest bouquet of mobile apps in the world.

Just recently, Fortnite-maker Epic Games filed a lawsuit against Google alleging the search engine giant's “anti-competitive conduct” breaches the local consumer law. Epic Games noted that Google's Android has roughly 20 million smartphones in Australia, and 90% of the apps on those phones were downloaded via the Google Play Store. Epic Games had last year sued Apple in Australia. It is worth noting that Epic Games is locked in similar legal battles in the UK, the US, and the European Union.

Google also faced a similar backlash in India recently. The company was forced to defer its Play Store billing policy in India to March 2022.