Apple Simplifies App Store Fees in the EU and Eases Rules for Third-Party Stores

Apple has announced a new, simplified fee structure for apps in the European Union. The company hopes to finally settle its long-running dispute with the European Commission over its business terms, which regulators have spent years criticizing as complex and unfair.

The key change is the elimination of the contentious Core Technology Fee, which was charged on every install. In its place comes a flat 5% fee on digital goods in apps distributed outside the App Store — through alternative marketplaces or over the web.

The New Rates

The fee on in-app purchases under the new terms will be 26% — down from 30% under the traditional terms. Even so, most developers will still be able to qualify for a reduced 15% through special programs: the App Store Small Business Program, the Mini Apps Partner Program, and the Video Partner Program, as well as for auto-renewing subscriptions after the first year.

Apps that use third-party payment systems will pay 20%, but for participants in the reduced-rate programs the fee drops to 10%. The chosen payment method — Apple's in-app purchases, external payments, or a combination of the two — will have to be maintained for 12 months.

Separate exceptions are laid out for external links within apps: they are prohibited in apps in the “Kids” category for safety reasons. Users under 18 will need parental approval to make purchases outside the App Store.

The Bar for Alternative Marketplaces Has Been Lowered

Perhaps the most notable easing concerns those looking to launch their own app store. Previously, Apple required developers either to prove they had significant funding, or to demonstrate two years of participation in the Developer Program along with an app that had more than one million first annual installs in the EU over the previous year.

Now meeting these milestones is no longer mandatory (though that route remains available). Financial soundness can also be demonstrated in other ways — public company status, a financial audit, or suitable venture funding.

This is not the first revision of the rules. Last year, after a €500 million fine for failing to comply with the Digital Markets Act (DMA) and the threat of further penalties, Apple introduced a more convoluted fee structure that critics dubbed an example of “malicious compliance.” The current move is an attempt to offer terms that will satisfy both developers and Brussels.

Source: TechCrunch