UPDATE 1-Google to cut app store fees on developers' first million in sales by half

Adds details on Google's move, background

March 16 (Reuters) - Alphabet Inc's GOOGL.O Google said on Tuesday it would cut the service fee that app developers pay to its app store by half for the first $1 million in revenue they earn every year.

The move will bring down Google's app store fees to 15% from 30%, the company said in a blog post. (https://bit.ly/3bPgpnc)

The decision follows a similar move by Apple Inc AAPL.O, which said in November that it planned to lower its app store commissions for software developers who make $1 million or less in proceeds each year from the store.

However, Google's policy change is not just limited to smaller developers.

Both the companies have come under fire from large firms such as Microsoft Corp MSFT.O, Spotify Technology SA SPOT.N, as well as startups and smaller companies, that allege the fees deprive consumers of choices and push up the price of apps.

Google said about 99% of developers on its app store would see a 50% reduction in fees after the move, which is effective July 1.

It was not immediately clear how big the financial impact of the move would be on Google.

(Reporting by Chavi Mehta in Bengaluru; Editing by Anil D'Silva and Aditya Soni)

((Chavi.Mehta@thomsonreuters.com;))