Apple Overhauls EU App Store Fees and Eases Regulations for Alternative App Stores

On Tuesday, Apple announced a simplified commission structure for apps within the European Union, aiming to resolve its ongoing conflicts with the European Commission over the company’s business practices. The updated model will replace Apple’s per-install Core Technology Fee with a flat 5% commission on digital goods in applications distributed outside of the App Store or via the web. Moreover, Apple has revised its fees for alternative payment methods and in-app purchases, making it easier for developers to set up alternative app stores.

These changes represent Apple’s latest attempt to align App Store business practices with EU regulations, following prolonged discussions with regulators concerning the complexity and fairness of the previous terms.

Last year, after incurring a €500 million fine for non-compliance with the EU’s Digital Markets Act (DMA) and facing threats of additional penalties, Apple adjusted its App Store fees in the EU. At that time, the company introduced a more complex fee structure, which critics accused of being “malicious compliance.” This earlier structure included an initial acquisition fee, fees for store services, and various service tiers tailored to developers’ needs.

With this new revision, Apple is now implementing a flat 5% commission on transactions in apps distributed outside the App Store, whether via alternative app marketplaces or the web.

Additionally, the new terms reduce Apple’s in-app purchase fees to 26%, down from the previous 30% rate. Most developers will continue to qualify for a lower fee of 15% through various special initiatives, such as the App Store Small Business Program, Mini Apps Partner Program, and Video Partner Program, as well as for apps with auto-renewing subscriptions after the first year, according to Apple.

For apps using alternative payment processing, a commission of 20% will apply, unless the app is part of one of the special programs, in which case the rate will drop to 10%.

Furthermore, Apple has clarified that developers will be committed to their chosen payment methods for a duration of 12 months, irrespective of whether they opt for Apple’s in-app purchases, external payments, or a mix of both.

The company has also granted exceptions for developers allowed to incorporate external links within their apps, while excluding these links from applications in the Kids category to ensure safety. Additionally, users under the age of 18 will need parental consent before making any purchases outside the App Store.

Significantly, the new regulations relax the requirements for developers to run an alternative app store, facilitating the establishment of marketplaces that meet specific financial stability criteria.

Previously, Apple required developers to demonstrate substantial financial backing or prove a minimum of two years in its Developer Program, along with an app that achieved over 1 million first-year installs in the EU from the previous calendar year.

Under the new guidelines, Apple has removed the need for developers to validate these conditions (though that option remains available) and introduced alternative ways to show financial backing, including public company status, financial audits, and qualifying venture capital funding.