Apple cuts App Store fees in EU amid regulatory pressure
What's the story
Apple has announced a new fee structure for third-party app stores in the European Union (EU). Under the new rules, apps bought through the official App Store using Apple's own system will have to pay a 26% commission on digital goods and services. Apps that use their own payment processing systems and accept credit cards directly will be charged 20%. Those linking to a website for purchases will incur a 15% fee.
Commission breakdown
5% commission on in-app purchases
The tech giant will now charge a 5% commission on in-app purchases, as part of its compliance with the EU's Digital Markets Act.
Apps distributed via third-party app stores or the web will also be charged this "Core Technology Commission."
The move is aimed at resolving ongoing disputes with regulators over Apple's App Store policies and practices.
The new fee tiers take effect on October 1.
App Store model
Apple's App Store model under global scrutiny
Apple's App Store model has been under fire globally for nearly a decade, with critics claiming it acts as a monopoly on iPhone software and imposes high fees on developers and users.
The company has maintained that its App Store and in-app purchase requirements are meant to enhance trust, safety, security, and prevent inappropriate apps.
Regulatory compliance
Apple collaborates with European Commission on child safety measures
The European Commission passed the Digital Markets Act in 2022, mandating "gatekeepers" like Apple to open their services and products such as Siri to third parties.
Despite some friction over App Store proposals, Apple has said its latest proposal resolves disagreements with the European Commission.
The company also collaborated with the EC to introduce child safety measures, including parental controls on certain in-app purchases.
Revenue impact
Apple faces challenges in App Store growth
Apple earns a lot from its App Store, which is reflected in its profitable Services division.
However, it did not mention the App Store as a major contributor to services growth in the last quarter for the first time since 2023.
CFO Kevan Parekh had cited slower mobile gaming among other factors impacting App Store performance during an analyst call in July.