Google Cuts Costs for Third-Party Sellers As Political Pressure Mounts

The Google logo on the outside of their NYC office Google Building 8510 / Getty Images
September 29, 2021

Google will reduce the fee for selling software on its cloud marketplace, the company’s latest attempt to appease politicians who want to break up big tech.

The search engine’s Cloud Platform will cut its 20 percent fee for third-party vendors to just 3 percent, CNBC reported Sunday. The reduction comes as Google faces an antitrust suit from 37 state attorneys general, who claim the tech company's control of its Android app store constitutes a monopoly. In July, Google slashed the cut it takes from app store sales from 30 to 15 percent.

Google is one of several tech companies to reduce third-party fees in response to growing pressure from lawmakers and third-party app developers. After Epic Games sued Apple for banning its apps, the company cut its take of app purchases from 30 to 15 percent. In August, Microsoft reduced its cut from games sold on its Windows App Store from 30 percent to 12 percent.

The Federal Trade Commission, which regulates anticompetitive behavior, has made policing online platforms a priority under President Joe Biden. A memo this month from FTC chairwoman Lina Khan emphasizes the importance of addressing the market power of digital platforms. The Senate is considering a bill that would make suits against app store platforms easier to pursue. App developers have long criticized tech giants for taking a substantial cut of sales within apps sold on their stores.

The app store battles have highlighted the control major tech companies have over other companies’ products and revenues they generate from sales within those apps. Apple said it has generated $100 million through its cut of sales from Epic Games’ apps alone.

A federal court ruled earlier this month that Apple had engaged in "anticompetitive conduct" and that its policies "hide critical information from consumers and illegally stifle consumer choice." The court instructed Apple not to punish developers for directing consumers to other payment systems. Apple had described its commission fees as "essential" to the operations of its App Store and said the App Store would become "a toxic kind of mess" without them.