Apple overhauls EU App Store fees, eases alternative-store rules

Apple announced Tuesday a simplified commission structure for apps in the European Union, in an effort to resolve its disagreements with the European Commission over its business terms. Under the new model, Apple will replace its per-install Core Technology Fee with a flat 5% commission on digital goods in apps distributed outside the App Store or on the web, adjust rates for alternative payments and its own in-app purchases, and make it easier for developers to open alternative app stores.

The changes mark Apple’s latest attempt to bring App Store business terms into compliance with EU regulation, after years of back-and-forth with regulators over the terms’ complexity and fairness. Apple had already adjusted its EU App Store fees last year after regulators fined it €500 million for noncompliance with the EU’s Digital Markets Act (DMA) and threatened further fines — a revision critics called an example of “malicious compliance,” built around an initial acquisition fee, store services fees, and multiple service tiers.

This latest revision is built around a flat 5% commission on transactions in apps distributed outside the App Store, whether through alternative marketplaces or the web. The new terms also set Apple’s standard in-app purchase fee at 26%, down from 30%; most developers will still qualify for a discounted 15% rate through programs like the App Store Small Business Program, the Mini Apps Partner Program, and the Video Partner Program, and for auto-renewing subscriptions after their first year, Apple said.

Apps using alternative payment processing will pay a 20% commission, unless they qualify for one of the special programs, in which case the rate drops to 10%. Developers will be locked into their chosen payment option — Apple’s in-app purchases, external payments, or a mix of both — for 12 months. Apple also carves out exceptions letting developers use external links inside apps, though it bars such links from apps in the Kids category for safety, and users under 18 will need parental approval before making purchases outside the App Store.

Notably, the new rules loosen the requirements to operate an alternative app store, letting in marketplaces that meet certain financial stability bars. Previously, Apple required developers to prove significant financial backing, or show they’d been in Apple’s Developer Program for at least two years with an app that had more than 1 million first annual installs in the EU the previous calendar year. Now Apple doesn’t require developers to hit those milestones (though that remains an option), and has added other ways to demonstrate financial backing, including public company status, financial audits, and qualifying VC funding.

Why it matters

The overhaul is Apple’s third stab at EU compliance in as many years, and its bet that easing entry for alternative app stores and payment options will finally satisfy regulators without giving up its core commission model.