Apple is slashing its App Store payment fees in half for smaller developers, from 30% to 15%

Tim Cook
Apple CEO Tim Cook.
  • Apple announced Wednesday it's reducing the commission it takes on App Store in-app purchases from 30% to 15% for small developers, starting January 1, 2021.
  • Apple's price reduction will apply to developers who made up to $1 million in revenue over the last year.
  • Apple has been engaged in a bitter fight over its App Store payments commission with major developers such as Spotify and Epic Games. Its rules have attracted antitrust scrutiny.
  • Visit Business Insider's homepage for more stories.

Apple just made a surprise move in its ongoing war with app developers.

Apple announced Wednesday morning it was changing its App Store policies to slash the commission it usually takes from in-app payments for smaller developers, from 30% to 15%.

The cut will apply to developers whose apps generated up to $1 million over the last year.

"We're launching this program to help small-business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love," Apple's CEO Tim Cook said in a press statement.

The program will launch on January 1, 2021.

This is the latest development in a bitter fight between Apple and developers over its rules on in-app purchases, which have attracted antitrust scrutiny both in the US and Europe.

The rules mean that developers have to use Apple's own payment system for in-app purchases, such as a Spotify Premium subscription. Apple automatically takes a 30% cut of every transaction.

Major developers including Spotify, Tinder-owner Match Group, and Epic Games have fought with Apple over its in-app payments rules.

They claim Apple is abusing its strict control over what apps can function on iOS devices, and that it is especially anticompetitive if Apple then decides to launch competing products, such as its music-streaming service Apple Music.

In September, developers formed a group called the Coalition for App Fairness to try to force Apple to get rid of the charge. Apple's announcement is unlikely to placate larger developers, who don't qualify for the price reduction.

The announcement also doesn't represent a huge financial hit for Apple. Per analytics provided to the New York Times by Sensor Tower, although this change will impact 98% of companies who pay a commission to Apple, their revenues combined only totalled 5% of App Store revenues generated last year.

Read the original article on Business Insider

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