Apple on Tuesday announced A simplified commission structure for apps in the European Union in an attempt to resolve disagreements with the European Commission over the tech giant’s business conditions. Under the new model, Apple will replace its Core Technology fee per installation with a 5% commission for digital goods in apps distributed outside the App Store or on the web. Apple also adjusted its rates for alternative payments and for its own in-app purchases, and made it easier for developers to open alternative app stores.
The change marks Apple’s latest attempt to create App Store business terms that comply with EU regulations, after years of back-and-forth with regulators over the complexity and fairness of the terms.
The tech giant restructured its App Store in the EU last year after regulators fined Apple 500 million euros for non-compliance with the EU’s Digital Marketing Act (DMA) and threatened further fines. In doing so, Apple introduced a more complex fee structure, which critics called an example of “harmful compliance.” The old structure included initial purchase fees, store service fees, and different service levels based on the needs of the developer.
Now Apple is presenting its latest amendment, highlighted by a flat commission of 5% on transactions in apps distributed outside the App Store, through alternative app markets or the web.
Meanwhile, the new terms set Apple’s in-app purchase fee at 26%, compared to 30% under its original terms. Most developers are still eligible for a 15% fee discount, however, through special programs such as the App Store Small Business Program, Mini Apps Partner Program, and Video Partner Program, and for apps that automatically renew after their first year, Apple said.
Additionally, apps using alternative payment processing will pay a 20% commission unless they are on a special program, in which case the rate drops to 10%.
Apple also noted that developers will be locked into their chosen payment option for 12 months, whether using Apple’s in-app purchases, external payments, or a combination of the two.
The company also issued an exception for developers who allow external links within their apps, barring such links from apps in the children’s category for security purposes. Users under the age of 18 will still need parental approval before making purchases outside of the App Store.
In particular, the new rules ease the need for developers to run alternative app stores, allowing the market to meet certain financial stability.
Previously, Apple required developers to prove that they have significant financial support or show that they have been in the Apple developer program for at least two years and have an app with more than 1 million annual installations in the EU in the previous calendar year.
Currently, Apple does not require developers to show that they have reached those milestones (although it is optional), and it has added other ways to show financial support, including public company status, financial audits, conditional VC capital, etc.
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