Apple Revamps EU App Store Fees and Eases Restrictions on Alternative App Store Options
On Tuesday, Apple unveiled a new commission structure for applications within the European Union, aiming to address ongoing disputes with the European Commission regarding its business practices. The revamped model eliminates the previous per-install Core Technology Fee, introducing a straightforward flat commission of 5% on digital goods sold in applications accessed outside the App Store or via the web. Additionally, Apple made modifications to its payment rates and simplified the process for developers wishing to establish alternative app stores.
These modifications represent Apple’s effort to align its App Store business practices with EU regulations, following a lengthy dialogue with regulators over the intricacies and fairness of its previous terms.
Last year, Apple modified its App Store fees in response to a €500 million fine imposed by regulators for failing to comply with the EU’s Digital Markets Act (DMA) and facing potential further penalties. The earlier fee structure was criticized as a form of “malicious compliance” due to its complexity, featuring diverse fees depending on service tiers distinct to developers’ requirements.
In its latest update, Apple has transitioned to a flat commission rate of 5% for transactions conducted in apps provided outside the App Store, including through alternative marketplaces or online platforms.
Moreover, the adjusted in-app purchase fees have decreased from 30% to 26%. Most developers, however, can access a reduced rate of 15% through specific initiatives like the App Store Small Business Program, Mini Apps Partner Program, and Video Partner Program, as well as for apps utilizing auto-renewing subscriptions after their initial year.
For applications opting for alternative payment systems, a 20% commission will be applied unless they fall within the special programs, where the rate would be lowered to 10%.
Apple also indicated that developers will be committed to their selected payment methods for a period of 12 months, whether they use Apple’s in-app purchases, external payment systems, or a combination of both.
The company has made exceptions that allow developers to implement external links in their applications, although such links will not be permitted in apps aimed at children for safety reasons. Additionally, users under 18 will require parental permission for purchases made outside the App Store.
Significantly, the new regulations ease the requirements for developers wishing to manage an alternative app store, enabling marketplaces that meet specific financial stability criteria.
Previously, Apple mandated that developers either demonstrate substantial financial backing or prove participation in Apple’s Developer Program for a minimum of two years and possess an app with over 1 million first-year installs in the EU the previous year.
Now, Apple has eliminated the necessity for developers to meet those specific criteria (although it remains an option). The company has introduced additional methods to Establish financial backing, including public company status, financial audits, and qualifying venture capital funding.
