To comply with the Digital Markets Act, Apple is announcing a sweeping set of changes to the App Store policy. This includes a new reduced commission structure.
iOS apps in the EU can now accept alternative terms with commission set at 17%, plus 3% if apps are using Apple’s In-App Purchase system. Either way, that’s a significant cut from the old 30% rate. Small business program developers will pay commission of 10%, plus 3%, down from 15%. There’s an additional new Core Technology Fee for ‘high volume apps’, which applies per install …
The Core Technology Fee (CTF) charges €0.50 per annual install, for apps that are popular enough to shift more than one million units per year. The CTF is charged per customer account for the first install in a 12-month period. Any repeated installs in the same year have no additional charge. Apple estimates less than 1% of developers will pay a Core Technology Fee, as most apps don’t reach the 1 million annual install threshold.
The new fee structure reflects the fact that the Apple App Store will no longer be the sole destination for EU customers to get apps. Developers can choose to accept Apple’s 10/17% commission to be inside the App Store, or distribute their apps elsewhere. However, the Core Technology Fee is applicable whether the app is sold inside the App Store or a third-party marketplace, if it crosses the volume threshold.
Apple’s monopoly on In-App Purchase is also no longer in effect, representing the 3% additional fee if developers choose to use it.
Makers of alternative app marketplaces themselves will also have to pay the Core Technology Fee, for the download of the alternative app store itself. For app marketplaces, the charge applies immediately — there is no 1 million free installs.
These new terms will go into effect in the EU in March, if developers choose to agree to them. Developers can continue using the traditional 15/30% fee structure if they wish. Apple has released a fee calculator tool to help developers predict their costs under the new structure.
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