Apple Cuts EU App Fees to 5% as Regulators Push Open iPhone Ecosystem
Synopsis
The new structure removes its initial acquisition and store-services fees as Apple adjusts its rules to comply with European Union digital-market regulations.
Key Highlights
- Apple will charge a 5% commission on digital transactions in apps distributed outside its App Store within the EU.
- Apps that use alternative payment processing will be subject to a 20% commission, although this can drop to 10% for developers in Apple’s small business programme.
- The new fees will come into effect on October 1.
Apple Reworks Its EU Fee Structure
Apple is changing its EU fee structure as it works to comply with the European Union’s Digital Markets Act. Under the new arrangement, the company will take a 5% commission on digital transactions made through apps distributed outside its App Store.
Apple changed its App Store rules and fees in Europe last year after regulators required the company to remove commercial barriers that made it difficult for developers to direct customers away from the App Store.
EU regulators had also raised concerns about Apple’s conditions, including its Core Technology Fee. They argued that these requirements could discourage developers from exploring alternative ways to distribute apps on Apple’s iOS platform.
New Fees for Developers
Under the updated structure, apps using alternative payment processing will be charged a 20% commission. Developers enrolled in Apple’s small business programme may qualify for a reduced rate of 10%.
For apps distributed through alternative app marketplaces or directly through the web, Apple will apply a 5% Core Technology Commission.
The revised system also eliminates the initial acquisition fee and store services fee included in Apple’s previous fee structure. The new terms will come into effect on October 1 Apple claims the updates will help resolve its ongoing issues with the EU and EC over how it distributes apps.
European Commission Will Monitor the Changes
The European Commission welcomed Apple’s updated terms and said it will keep an eye on how the new system is implemented.
Apple plans to introduce a single set of terms for developers operating within the EU. The company said the approach will be similar to its commission-based systems in countries such as Japan and Brazil.
Both Japan and Brazil have also pushed Apple to make changes to its App Store business model. Developers have traditionally paid commissions of up to 30% on purchases of digital goods and services. Apple is also still dealing with legal challenges over its developer fees in the United States.
Epic Games Criticises Apple’s New Fees
Epic Games, the company behind Fortnite, has criticised Apple’s new commission structure, describing the fees as “junk fees.” Epic argues that the changes still fail to create the level of competition in the mobile app market required under the Digital Markets Act.
The company also warned that if the European Commission accepts Apple’s new terms and ends its enforcement actions, consumers and developers may not receive the benefits that the legislation was designed to provide.
Source: Reuters
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