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OAKLAND, California: Alphabet Inc’s Google on Sept. 28 sought to refute criticism that it selectively enforces its 30% mobile app store tax, requiring more than 3% apps that sell non-compliant digital items to follow the rules within a year.
The change follows lawsuits for Fortnite Video game maker Epic Games last month accused Google and Apple Inc of anti-competitive conduct. Apps sold in tech leaders’ stores must use their payment systems in order to collect a portion of sales, what the developers describe as a tax. The companies defend the accusations.
App stores are a fast-growing business as sales of Google’s search ads and Apple’s iPhone flatten out.
Google said that less than 3% of developers with applications in its Play store sold digital products during the last 12 months, and almost 97% comply with its payment system policy.
Dating app maker Match Group Inc is among the companies that have publicly said they don’t pay Google’s 30% fee, which drops to 15% in subsequent years if it’s for a subscription service.
Antitrust regulators in several countries are looking into the issue, including in South Korea, where various media apps anticipating stricter enforcement by Google pre-emptively complained to government officials recently.
Apps have said the 30% is steep compared to the 2% fees for typical credit card payment processors, while Apple and Google say the amount covers the security and marketing benefits their credit card stores provide. Applications.
New apps must use Google’s payment tool for sales by January 20, while existing apps have until September 30, 2021.
Apps that switched to selling digital items from physical goods and services due to the coronavirus pandemic may have additional time to comply, Google said. Apple said last week that a similar temporary reprieve runs through Dec. 31.
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