Apple’s Latest Attempt to Comply with EU Regulations

Apple has announced a simplified commission structure for apps in the European Union, marking its latest attempt to create App Store business terms that comply with EU regulations. The tech giant had adjusted its App Store fees in the EU last year after regulators fined Apple €500 million for noncompliance with the EU’s Digital Markets Act (DMA) and threatened further fines.

The new model replaces Apple’s per-install Core Technology Fee with a flat 5% commission on digital goods in apps distributed outside the App Store or on the web. This change aims to address the complexity and fairness of Apple’s business terms, which have been a point of contention with regulators for years.

A Flatter Commission Structure

Under the new model, Apple’s in-app purchase fees will be set at 26%, compared with 30% under its traditional terms. However, most developers will still qualify for the discounted 15% fee through special programs such as the App Store Small Business Program, Mini Apps Partner Program, and Video Partner Program. Additionally, apps with auto-renewing subscriptions after their first year will also be eligible for the discounted rate.

Apps using alternative payment processing will pay a 20% commission unless they’re in one of the special programs, in which case the rate will drop to 10%. This change is expected to benefit developers who use external payment processing systems.

Loosening Requirements for Alternative App Stores

Apple has also loosened the requirements for developers to operate an alternative app store. Previously, developers had to either prove they had significant financial backing or show that they had been in Apple’s Developer Program for at least two years and had an app with more than 1 million first annual installs in the EU in the previous calendar year. Now, developers will be able to demonstrate financial backing through various means, including public company status, financial audits, qualifying VC funding, and more.

This change is expected to make it easier for developers to operate alternative app stores, which can provide users with more choices and flexibility in the app ecosystem.

Additional Changes and Exceptions

Apple has also introduced a 12-month lock-in period for developers who choose to use Apple’s in-app purchases, external payments, or a combination of the two. This means that developers will be locked into their chosen payment options for at least a year.

Additionally, Apple has carved out exceptions for developers allowed to use external links inside their apps, barring such links from apps in the Kids category for safety purposes. Users under 18 years old will also need parental approval before making purchases outside the App Store.