Google To Impose Play Store Tax On The 3% Apps That Are Not Paying
On Monday, Alphabet Inc’s Google has sought to invalidate criticism that the company is selectively imposing a mobile app store tax of 30% and demanding that the over 3% apps that are selling digital items without complying must start following the rules within a year.
This change is after the lawsuits that were filed last month by ‘Fortnite’ video game maker Epic Games accusing Apple Inc. and Google of anticompetitive product. The apps that are sold on the stores of these tech leaders are required to make use of their payment systems so that the companies can collect a part of the sales, which is defined as tax. However, both the companies have denied these allegations.
The app stores of Google and Apple are fast-growing businesses, as the sales of the search ads of both companies flatten out.
As per Google, less than 3% of developers with their apps on the company’s play store sold digital goods over the last year, and almost 97% of developers comply with the payment system policy of the company.
Match Group Inc., the dating apps maker is one of those companies that have openly said that they do not the 30% fee of Google, which decreases to 15% in subsequent years if it is for a subscription service.
Antitrust regulators of various countries have started looking into the issue, including South Korea, where many media apps have filed compliant to government officials recently, as they are anticipating stricter enforcement from Google.
Apps have said that compared to the 2% fees of typical credit card payment process, 30% is quite excessive. Apple and Google have said that this amount is charged for security purposes and the marketing benefits that the app stores provide.
The new apps must make use of the payment system of Google for sales by Jan 20, while the existing apps of Google can do it by Sept 30, 2021.
Due to the COVID-19 pandemic, many apps had shifted from selling physical goods and services to digital items, and those apps may get some extra time to comply – Google. According to Apple, last week as similar temporary reprieve extends through Dec 31.
I am Darryl Broadhurst and i give investors an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicizes valuable information for shareholder community.
