Apple announces a change in the App Store’s commission policy. Developers who earn less than $1 million per year will pay 15% from January 1, 2020, instead of the current 30%. Through the ‘App Store Small Business Program’, “small” developers will pay half of the commissions. A drastic reduction of their fees that at the moment is unknown in what percentage will affect Apple’s income through its app store.
This reduction comes weeks after Apple’s legal battle with Epic Games and Spotify, who consider the App Store rules “illegal” and have asked the company to lower their commissions. According to Spotify, the streaming service had to increase its price by 30% when it was contracted from iOS due to the extra cost generated from the commissions.
To avoid this 30% commission, companies like Netflix also abandoned their paid subscriptions through the App Store to avoid the commissions. In the case of Epic Games, the company offers its popular game ‘Fortnite’ through its own store, precisely to avoid the 30% commission rate.
With the recent change, Apple seems to give in to the complaints of the developers and lowers its rates to 15%. However, it does so only halfway. Companies such as Epic Games and Spotify, which have asked for a reduction on numerous occasions, will continue to pay 30%.
This position of Apple led the European Commission last June to open a formal antitrust investigation to assess whether the rules for distributing applications from the App Store were in breach of European Union rules.
From the Commission they pointed out that “Apple’s competitors have decided to either disable the possibility of subscribing to the application entirely or have increased their subscription prices in the application and have passed on Apple’s fee to consumers” and “they were not allowed to inform users about possible subscription alternatives outside the application”.
This investigation is still open and it is not clear that Apple’s new move to lower fees could change the Commission’s decision.