App store revenue cuts in Russia might be capped at 20%

JC Torres - Sep 1, 2020, 8:23pm CDT
App store revenue cuts in Russia might be capped at 20%

While the matter is still being debated in the US, both inside and outside of courts, Russia is already starting to take steps to cut down what has been an unwritten business practice when it comes to digital content distribution, especially in apps and games. A lawmaker has proposed reducing the amount that app store owners are able to take from sales and in-app purchases from the usual 30% down to 20% but adds one more requirement that Apple and Google might not be so keen on obliging.

It has become pretty much common business practice and tradition for profits to be split 70/30 between the content owner and the distribution platform. That has been the practice on Steam and is currently the long-standing practice on Apple’s App Store and Google Play Store. That practice has been challenged time and again by developers but Epic Games has finally brought it to court in a very high-profile way.

Now a lawmaker in Russia proposed to take action on those complaints. While not totally abolishing this revenue cut system, which, of course, would be painful for app store owners, the law is proposing a 20% cap on the commission that Apple, Google, and other app stores would take from outright sales as well as piecemeal in-app purchases.

The proposed law does have one additional stipulation, that these app sellers a third of their commissions every quarter to on a special training fund for IT specialists. While Google and Apple would be happy to make a one-off or even regular donations to such efforts to improve local IT expertise, it might not be too happy being forced to set aside an amount for it.

The law could be especially problematic for Apple as its app stores are the only sanctioned or, in the case of iOS, available sources for apps on its devices. The company is already in the midst of legal headaches in Russia after it was ruled to be guilty of anti-competitive practices when it blocked third-party parental control apps in favor of its own Screen Time feature.


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