Apple (AAPL) Slashes App Store Commissions Following EU Regulatory Settlement

Key Takeaways

• Apple’s European Commission App Store fee conflict has concluded with comprehensive new pricing terms launching October 1.
• The per-install Core Technology Fee is eliminated, replaced by a 5% Core Technology Commission applied to digital sales outside Apple’s ecosystem.
• In-app purchase commissions through the App Store decrease from 30% to 26%, with qualified smaller developers paying 15%.
• Apps utilizing alternative payment methods face a 20% commission, while those directing users externally pay 15%.
• Epic Games contends Apple’s 15% link-out commission remains excessive and intends to challenge the proposal within 60 days.

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Apple has brought closure to its protracted European Commission conflict regarding App Store pricing policies, unveiling a comprehensive fee restructuring that becomes effective throughout the European Union starting October 1.

The most significant modification eliminates the Core Technology Fee, which previously imposed per-installation charges on developers after surpassing one million downloads within a rolling 12-month period. This mechanism is being superseded by the Core Technology Commission, which establishes a uniform 5% levy on digital sales conducted through applications distributed beyond the App Store infrastructure.

Both the initial acquisition charge and store services fee have been discontinued under this revised framework.

Developers marketing products through the App Store while utilizing Apple’s proprietary in-app purchasing infrastructure will experience a commission reduction from 30% to 26%. While this represents a relatively modest decrease, it applies universally to mainstream applications.

Participants in Apple’s Small Business Program, Mini Apps Partner Program, or Video Partner Program receive more favorable treatment, paying just 15% on in-app transactions. This identical 15% rate extends to auto-renewing subscriptions following their initial year.

Applications employing third-party payment processing within the App Store environment will incur a 20% commission. Developers qualifying for the aforementioned programs pay 10%.

External Purchase Links Now Permitted

Applications that redirect consumers outside the app interface to finalize transactions will be charged a 15% commission. Smaller developers enrolled in qualifying programs pay 10%.

Applications distributed via alternative marketplaces or delivered directly through web channels will exclusively pay the 5% Core Technology Commission, with no additional charges applied.

Apple is additionally permitting a capability previously prohibited within the EU: developers may now present Apple In-App Purchase options alongside alternative payment methods within a single application. The previous policy mandated selecting one approach exclusively.

Restrictions apply, however. Developers must commit to their selected payment configuration for a minimum 12-month period. Apple justifies this requirement as necessary for maintaining user experience consistency.

Enhanced Child Protection Requirements Introduced

Apple has implemented enhanced child safety protocols accompanying the revised payment frameworks. Applications classified under the Kids category face prohibition from directing users to external websites for purchase completion. For users below 18 years of age, applications utilizing alternative payments or external purchase links must incorporate parental gate mechanisms. For users under 13, external website redirection for transactions is completely prohibited.

Apple is simultaneously expanding eligibility criteria for entities permitted to operate alternative app marketplaces within the EU. Updated qualifying standards encompass publicly traded companies, organizations supported by established venture capital, entities having undergone financial audits, or government and nonprofit organizations.

Notwithstanding the European Commission settlement, Epic Games remains dissatisfied. Apple submitted a comparable proposal to the U.S. District Court for the Northern District of California last week as part of its continuing six-year litigation with the Fortnite developer.

Epic argues Apple’s proposed 15% link-out commission in the United States exceeds parameters permitted by the Ninth Circuit Court, and possesses approximately 60 days to submit its formal opposition supported by expert testimony. Epic advocates for complete elimination of commissions on link-out purchases for American consumers.

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Source: https://blockonomi.com/apple-aapl-slashes-app-store-commissions-following-eu-regulatory-settlement/