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Apple cuts EU third-party app store commission to 5%

Apple on Tuesday announced that third-party app stores in the European Union will pay a 5 per cent commission on in-app purchases, saying the move will help resolve regulatory disputes related to the implementation of the bloc’s Digital Markets Act.

Under the new fee structure, apps distributed through Apple’s App Store and using its payment system will be charged a 26 per cent commission on digital goods and services.

Apps that use their own payment systems to process transactions directly with customers will pay Apple 20 per cent, while those that direct users to external websites to complete purchases will be charged 15 per cent.

Meanwhile, apps distributed through third-party app stores or the web will attract a 5 per cent fee, which Apple refers to as its “Core Technology Commission.”

Apple said some of the fees can be reduced by as much as half for developers participating in eligible Apple programmes.

The new structure replaces a more complex fee system the company proposed last year and will take effect on October 1.

Apple has historically charged a 30 per cent commission on most iPhone in-app purchases, with a reduced rate of 15 per cent for some developers and transactions. It has also required most non-enterprise iPhone apps to be distributed through its App Store.

However, the App Store model has faced growing scrutiny from regulators and lawsuits worldwide over the past decade.

Critics have accused Apple of maintaining a monopoly over iPhone software distribution while imposing high fees on developers and consumers.

The European Commission introduced the Digital Markets Act in 2022, requiring designated “gatekeepers” such as Apple to open services including the App Store and Siri to third-party providers.

However, Apple’s proposals for complying with the rules have faced pushback from the European Commission, resulting in significant fines against the company.

Only a few markets require Apple to support third-party app stores for iPhone users. Europe is currently the only region where users can also install iPhone software directly from the web. Japan and Brazil have likewise introduced rules requiring Apple to allow alternative app stores.