Apple to lower App Store fees for ‘vast majority’ of developers starting January 1
Apple has announced a new Small Business Program that will cut the amount of commission it charges some app developers.
As part of the program, developers earning less than $1 million a year will pay 15 percent on all transactions, half of the current 30 percent rate. This change will go into effect on January 1st, 2021.
“The new App Store Small Business Program will benefit the vast majority of developers who sell digital goods and services on the store, providing them with a reduced commission on paid apps and in-app purchases,” the tech giant outlined in a blog post.
Apple says that comprehensive details about the new program will be released in early December, but that the change essentially means that existing developers earning less than $1 million will qualify for the reduced commission.
If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the rest of the year. However, if a developer’s business falls below the $1 million threshold in a future year, they can requalify for the 15 percent commission the year after.
Apple CEO Tim Cook stated in the blog post that “small businesses are the backbone of our global economy” and that this new change will help them “write the next chapter of creativity and prosperity on the App Store.”
Larger businesses that earn more than $1 million a year won’t see any changes, and the 30 percent rate remains in place for them.
Apple’s App Store policies have been long criticized by developers who say the tech giant has too much control of the review process and that its commission rate is unfair. For instance, Epic recently intentionally broke Apple’s rules on in-app purchases in protest of the policies.
The tech giant responded by banning Epic from the App Store in order to force it to comply with its rules, and the two are currently in an ongoing legal battle.
Epic’s clash with Apple has been backed by several other players such as Microsoft, and has led a growing public discontent with Apple’s policies. There’s also the possibility that the tech giant could face an antitrust complaint in the United States
Apple is likely hoping to sway some smaller developers and ease the criticism it’s facing with this new change.