Apple Lowers EU App Store Fees with New 5% Alternative Channel Commission
By Supantha Mukherjee
Apple's Response to EU Digital Markets Act and Fee Changes
New Commission Structure for Alternative App Distribution
STOCKHOLM, Aug 18 (Reuters) - Apple said on Tuesday it will charge a 5% commission on digital transactions in apps distributed outside its App Store, replacing a more complex system as it seeks to comply with the European Union's Digital Markets Act.
Background: EU Antitrust Actions and Previous App Store Rules
The company last year changed App Store rules and fees in the EU after the bloc's antitrust regulators ordered it to remove commercial barriers that they said hindered developers from directing customers outside the store.
The regulators criticised Apple's conditions, including a new Core Technology Fee, saying they discouraged developers from using alternative app distribution channels on its iOS mobile operating system.
Commission Rates for Different Payment Processing Options
Apple said on Tuesday that App Store apps using alternative payment processing will face a 20% commission, although fees could fall to 10% under its small business programme.
For apps distributed through alternative app marketplaces or the web, Apple will charge a 5% Core Technology Commission.
Elimination of Previous Fees and Implementation Timeline
The new terms eliminate the initial acquisition fee and store services fee charged under the previous system.
The changes, effective October 1, will resolve disagreements with the EU and the European Commission over these issues, Apple said.
Reactions and Global Context
EU Commission's Response
The Commission said it welcomed Apple's changes, and will monitor their implementation.
Comparison with Other Markets and Ongoing Litigation
Apple will introduce a single set of terms for developers operating in the EU that are similar to the commission-based terms it offers in markets such as Japan and Brazil, the company said.
Japan and Brazil have sought to open up Apple's App Store business model, under which developers have long paid commissions of up to 30% on in-app purchases of digital goods and services. Apple is still litigating over what it can charge developers in the United States.
(Reporting by Supantha Mukherjee in Stockholm. Editing by Mark Potter)