Google announced today that it would halve fees on sales made in its app store. The change will reduce the Google Play store’s service fee from 30% to 15% on Jan. 1, 2022. The company also indicated that it would introduce a program to unlock even lower fees for media apps.
The cut had meaningful effects on subscription-oriented tech businesses today like Roblox (+5.8%), Duolingo (+12.8%), and Spotify (+1.5%). Dating apps, like Bumble (+7.4%) and Match Group (+10.2%), also enjoyed the benefits of reduced fees. ❤️ All of these businesses rely on Apple and Google’s respective app stores to sell subscriptions and make microtransactions.
It might be a sign of the way that things are going — lower fees now are meant to appease regulators and lawmakers which have brought lawsuits against Google and Apple, alleging that their app store fees constitute antitrust violations. However, reducing fees might not be enough for the companies.
A ruling made by a judge in Sept. 2021 opened up the floodgates for app developers to use payment competitors like Stripe, PayPal, and Square in lieu of the tech giants’ app store payment system.
$GOOG was mostly unaffected by the decision. It traded up just 8 bips in regular trading today.