Under rising pressure from developers in India, the company's largest market in terms of user base, Google has reduced the commission for in-app purchases to 15 percent, beginning January 1.

The Google Play Store will begin charging a 15 percent commission to third-party subscription apps on Jan. 1.

Subscription apps were previously charged 30 percent for the first year and 15 percent after that. The first $1 million in income was also subject to a 15 percent penalty by Google.

The company is also facing accusations that the Google and Apple Inc. app stores have become too strong, forcing developers to follow rigorous guidelines. Apple likewise charges 15 percent after the first year for subscriptions but hasn't reduced the cut from 30percent in the first year.

Non-subscription Google Play apps will still have to contribute 30 percent of their sales, although that percentage reduces to 15 percent after the first $1 million in revenue. According to the firm, 99 percent of developers are eligible for a service fee of 15 percent or less.

In addition, the company is modifying the way it charges for media apps. Google established the Play Media Experience program for select developers earlier this year, which charged a variable rate below 15 percent depending on the type of media app. For certain partners, the program will now provide rates as low as 10 percent. Over 100,000 monthly active users, as well as extensive integration with various Google services and cross-device functionality, are required for such apps.

Google's app store is far smaller than Apple's, which generates more revenue from iPhone users. Google has made various attempts to develop its Android business, including promoting its own premium smartphone Pixel line.

In the meantime, shares of prominent subscription applications have risen as a result of the news. Bumble Inc. and Match Group Inc., two dating service producers, each surged up to 11 percent. Spotify Technology SA, a music streaming company, saw its stock rise as much as 4.7 percent.

According to Google, the adjustment is being made since “customer attrition makes it difficult for subscription businesses to benefit" from a reduction in the second year. Digital subscriptions have become one of the fastest-growing business models for developers, but we know that subscription firms have unique client acquisition and retention issues”, says Sameer Samat, a Google vice president.

“To support the special needs of developers offering subscriptions, beginning January 1, 2022, we're reducing the service cost for all subscriptions on Google Play from 30 percent to 15 percent, effective immediately”, he adds.