Alphabet Inc’s (NASDAQ: GOOGL) Google has reached a deal with US developers which will allow consumers to subscribe to services outside its Play Store. This marks the latest change for the app store space that Alphabet and Apple Inc (NASDAQ: AAPL) dominate.
Google to support developers earning less than $2 million
Google is planning to offer around $90 million to support developers that earn less than $2 million per year through its App Store from 2016 through 2021. According to a statement released by Google on Thursday, a 15% fee will still be applied to the first $1 million per annum income that US developers generate from the Play Store.
The agreement is similar to one that Apple reached with small programmers last year after they demanded changes to the way app stores operate. Similar to the Google deal, Apple programmers were permitted to email or otherwise directly market lower prices to customers beyond its App Store. Apple also consented to support developers with a fund of $100 million, which is a little more than what Google is providing.
Apple now permits third-party paid services to bill users outside of its App Store, avoiding the technology giant’s 15-30% fee. This is possible because of a previous deal with the Japanese Fair Trade Commission.
Billings and commissions on premium services have been facing regulatory scrutiny
The fees and billing limits imposed on premium services in their application store have been the subject of considerable legal and governmental scrutiny for both businesses. A bill to require the IT industry to alter its software business structures is being considered by Congress. Thirty-two states sued Google last July, in part because of its app-store restrictions.
Match Group Inc., the company behind dating apps like Tinder, filed a lawsuit against Alphabet in May regarding the Play Store standards, alleging that the search engine giant was operating as a monopoly by setting its pricing guidelines. Match claimed that within a few weeks, Google changed its regulations, which led the dating service to give up its legal fight for a temporary injunction.
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