Just read this over at the Android Developers google forum:

My app had a one-day sale on all platforms and app stores. The price went from 2.99 to free for just today, but now that the sale is over, I need to revert the price back to 2.99. The bad news is, the developer console will not let me change it! I have to pull the app until I can get this resolved. What can I do?

Apparently, google has this clause in it’s developer’s agreement:

You may also choose to distribute Products for free. If the Product is free, you will not be charged a Transaction Fee. You may not collect future charges from users for copies of the Products that those users were initially allowed to download for free. This is not intended to prevent distribution of free trial versions of the Product with an “upsell” option to obtain the full version of the Product: Such free trials for Products are encouraged. However, if you want to collect fees after the free trial expires, you must collect all fees for the full version of the Product through the Payment Processor on the Market. In this Agreement, “free” means there are no charges or fees of any kind for use of the Product. All fees received by Developers for Products distributed via the Market must be processed by the Market’s Payment Processor.

So, basically, once the app is free, it will always be free unless you create a new “full” version package and put it up on the market. The solution in the above scenario seems to be that the developer now needs to pull down his previously published app (which is now free), change the package component name and then republish the app. Of course, this means that he loses track of all the data and customers currently associated with the app.

I’m not sure whether this is good or bad. From customers’ point of view it looks good and from developers’ point of view it looks bad. I also don’t know whether this also applies to reducing the price and then increasing it as I can’t put up paid apps in the market yet (though this seems to be allowed as I’ve seen reports of apps increasing their prices). Let me know what you think about this clause (and any clarifications about non-free but fluctuating prices would also be welcome)