Apple To Reduce App Store Commission To 15 Percent For Certain Small Businesses
Apple is launching a new program that will bring its App Store commission down to 15% for small businesses that earn up to US$1 million a year. Its regular commission rate is 30%.
The App Store Small Business Program will launch on January 1, 2021, with Apple saying that it will benefit the “vast majority of developers who sell digital goods and services on the store”. Those who meet the requirement in 2020 “for all of their apps” and newcomers to the App Store can qualify for the lower commission as well.
“Apps have taken on new importance as businesses adapt to a virtual world during the pandemic, and many small businesses have launched or dramatically grown their digital presence in order to continue to reach their customers and communities,” said Apple in its press release. “The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem.”
Developers who pass the US$1 million mark will have the regular commission rate applied for the rest of the year, while falling below the mark will make them qualified for the reduced commission the following year.
Small developers have told Apple Insider that Apple’s move was welcome. However, big companies like Epic and Spotify were not so celebratory.
“This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally,” CNBC reported Epic CEO Tim Sweeney as saying.
“By giving special 15% terms to select robber barons like Amazon, and now also to small indies, Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30% tax on most in-app purchases.”
Meanwhile, the Coalition of App Fairness, which Epic and Spotify are part of, called Apple’s move a “symbolic gesture” in a tweet.
For Apple’s part, the tech company said in its press release that its 30% rate was found to be “in the mainstream for app distribution and gaming platforms” by an independent study earlier this year. However, that’s unlikely to dissuade Sweeney’s criticisms, with the Epic CEO recently comparing the battle against Apple to fighting for civil rights.