Apple and Google have been facing a lot of problems around the world with regard to their 30% commission on app purchases. Well, it looks like India too may soon be putting the tech giants under pressure to reduce their charges. According to a recent study by the Alliance of Digital India Foundation (ADIF), many app developers in India find it difficult to distribute their apps to the masses due to the high fees incurred.
Paid apps on the App Store and Google Play Store are liable to shell out a 30% commission on any transaction done like subscriptions or purchasing an app. However, there have been recent amendments by both the company. Last year, Apple introduced the ‘App Store Small Business Program’ that reduced the commission to 15% for any app that has made a revenue of up to $1 million every year. Developers also got to see similar changes in January 2022 in the Google Play Store.
If any of the apps have a subscription model, the commission remains 30% for the first year. However, any renewals that customers initiate after a year will see a reduced commission of 15%.
The report extensively lists many of the lawsuits that have been filed against major app development platforms like Android and iOS. One of those is also the lawsuit filed by Epic Games, where the company highlighted how Apple was forcing apps to use the Apple payment gateway. Developers were not allowed to redirect their customers to their own websites to complete the transactions.
Apple has argued that the app commissions were only a fraction of the revenue the company earned. A majority is from devices like the iPhone, iPads and Macs.
We love free apps
You can’t deny it. But the fact is the majority of the users have a preference for free apps. Subscription services like Spotify, Netflix, and Amazon Prime have their own payment portals or allow users to make renewals on their websites as well.
This new study may not have any immediate impact on the way users subscribe to services. Apple recently stopped accepting automated payments from debit and credit cards in India. This was in line with the RBI’s instructions to adhere to multi-factor authentication for any renewal payments or standing instructions. You can now only add funds to your account to make purchases or renew subscriptions.
