Wednesday 18 November 2020 1:54 pm

Apple cuts App Store commission following developer backlash

Apple is slashing the commission it takes from some purchases made through the App Store following widespread criticism of the charges.

The tech giant takes a 30 per cent cut of most app and virtual goods sales, though this drops to 15 per cent for subscriptions that remain active for more than a year.

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But Apple today said it was reducing its commission to 15 per cent for developers that generate $1m (£830,000) or less in proceeds from the store each year.

It follows a backlash over the iPhone maker’s high App Store fees, which critics say limit consumer choices and drive up the price of apps.

Microsoft and Spotify are among the companies to hit out at Apple over its commission, while a number of startups and smaller developers have also raised complaints.

It also comes as Apple and other tech giants face scrutiny over alleged anti-competitive practices, with regulators honing in on potential abuses of market power.

Following an antitrust complaint made by streaming giant Spotify, the EU earlier this year launched an investigation into Apple’s control over the app market.

Chief executive Tim Cook also faced questions from senators over the issue during an antitrust hearing in July.

While the change in commission rates is likely to appease many smaller developers, it will make no difference to larger app makers who earn more than $1m per year.

Andy Yen, founder and chief executive of encrypted email service Proton Mail, branded the changes a “thinly disguised attempt to escape regulatory scrutiny”.

“It is ironic that Apple, a $2 trillion company, considers that any company making more than $1m is making way too much money and needs to pay higher fees,” he said.

“What small businesses need is not a slightly cheaper monopoly, but a real choice of payment methods in the App Store.”

Apple is also locked in a public row with Epic Games, the maker of hit video game Fortnite, over its fees.

In August Apple kicked Epic off the App Store after it attempted to circumvent in-app payment methods in protest at Apple’s “monopolistic” practices. Epic is now suing Apple in Australia over the dispute.

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Apple has not said how many developers will benefit from the new changes, but said it will give more details next month.

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world,” boss Cook said in a statement.

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