Apple announced on Tuesday a simplified set of fees and rules for developers selling apps in the European Union, its latest attempt to satisfy regulators enforcing the bloc’s Digital Markets Act (DMA). The changes take effect on 1 October.
A flat fee replaces a complicated formula
At the centre of the overhaul is a new charge Apple calls the Core Technology Commission. Under the new model, Apple will replace its per-install Core Technology Fee with a flat 5% commission on digital goods in apps distributed outside the App Store or on the web, according to TechCrunch. The fee applies whether a developer sells through a rival app marketplace or through a website, both distribution routes that the DMA forced Apple to permit on iPhones sold in the EU.
The previous system charged large developers a fee for every app install beyond a free threshold, a structure critics said penalised popular free apps regardless of whether they generated any revenue. Apple has now scrapped that fee along with two related charges, the initial acquisition fee and the store services fee, according to MacRumors.
Lower commissions inside the App Store too
Apple is also adjusting what it charges within its own storefront. Apps that keep using Apple’s in-app purchase system will pay a 26% commission, compared with the standard 30% Apple has long applied worldwide, per Reuters. Most developers, however, will continue to pay a reduced 15% rate through programmes such as the App Store Small Business Program, or after the first year of an auto-renewing subscription, TechCrunch reports.
Apps that direct users to complete a purchase by linking out to a website will now be charged 15%, while those using alternative in-app payment processors will pay 20%, both falling to 10% for developers in Apple’s discount programmes, according to 9to5Mac.
“These changes resolve Apple’s disagreements with the Commission over business terms and alternative distribution.”
Why Brussels matters here
The changes cap more than two years of tension between Apple and the European Commission, the EU’s executive arm, which enforces the Digital Markets Act. That law designates Apple as a “gatekeeper” and requires it to open the iPhone to competing app stores and payment systems, a level of openness Apple does not offer in most other markets, including the United States. Reuters notes that regulators had criticised conditions including the Core Technology Fee for discouraging developers from using alternative distribution channels.
Brussels fined Apple €500 million last year for failing to comply with the DMA’s anti-steering provisions, which require Apple to let developers tell customers about cheaper deals available outside the App Store. Only a handful of regions require Apple to enable third-party app stores at all, among them Japan and Brazil, and Europe remains the only market where users can install iPhone software directly from the web, according to CNBC.
For consumers in Europe, the practical change may be limited in the short term. But developers, from small studios to major platforms such as Spotify and Epic Games, which have both fought Apple’s App Store rules for years, stand to gain more flexibility in how they charge customers and which payment systems they use.
Not everyone is satisfied. Epic Games contends Apple’s 15% link-out commission remains excessive and intends to challenge the proposal within 60 days, according to Blockonomi.
The European Commission has said it welcomes Apple’s changes and will monitor how they are implemented in practice, a signal that the long-running dispute, while eased, may not be entirely closed.
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