Apple Revamps EU App Store Commission Structure

Apple has announced a simplified commission framework for apps distributed within the European Union, in a move aimed at resolving ongoing disputes with the European Commission over its business terms. The revised model replaces the per-install Core Technology Fee with a flat 5% commission on digital goods sold through apps distributed outside the App Store, including those offered via alternative app marketplaces or the web.

The announcement represents Apple's latest effort to align its App Store business practices with EU regulations, following years of friction with regulators over the complexity and fairness of its fee structure. The company had previously adjusted its EU App Store fees last year after regulators fined Apple €500 million for noncompliance with the EU's Digital Markets Act (DMA) and warned of further penalties. That earlier revision introduced a more intricate fee system, which critics described as an example of "malicious compliance." The old structure featured an initial acquisition fee, store services fees, and multiple service tiers based on developers' needs.

New Fee Structure and Payment Terms

Under the newly announced terms, Apple's in-app purchase commission is set at 26%, down from the traditional 30% rate. However, most developers will still qualify for a reduced 15% fee through programs such as the App Store Small Business Program, Mini Apps Partner Program, and Video Partner Program, as well as for apps with auto-renewing subscriptions after their first year, according to Apple.

For apps that utilize alternative payment processing, the commission will be 20%, unless the developer participates in one of the special programs, in which case the rate drops to 10%. Apple also noted that developers will be locked into their chosen payment options for a 12-month period, whether they use Apple's in-app purchases, external payments, or a combination of both.

Additional Rules and Exceptions

Apple has carved out exceptions for developers permitted to use external links within their apps, barring such links in apps categorized under the Kids category for safety reasons. Additionally, users under the age of 18 will require parental approval before making purchases outside the App Store.

Loosened Requirements for Alternative App Stores

Notably, the new rules relax the criteria for developers seeking to operate an alternative app store, allowing marketplaces that meet certain financial stability thresholds. Previously, Apple required developers to either demonstrate significant financial backing or show that they had been in Apple's Developer Program for at least two years and had an app with more than 1 million first annual installs in the EU in the previous calendar year.

Now, Apple no longer requires developers to prove they've met those specific milestones, though that remains an option. Instead, the company has added other ways to demonstrate financial backing, including public company status, financial audits, qualifying venture capital funding, and more.

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