Apple Says New App Store Commission Is 15% for Growing Apps

Currently, Apple charges a 30% commission on the total price of paid apps and makes app purchases through the App Store.

Apple removed from its App Store the popular Fortnite Game earlier this year. This is because Epic Games, the parent company of Fortnite, tried to avoid the steep 30% commission that Apple collects on all purchases through the App Store.

• Apple removed Fortnite from its app store earlier this year. 
• The so-called “App Store Small Business Plan” will launch on January 1st.
• The company said it would reduce the App Store commission rate to 15% for developers.
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Epic Games claims that the technology company is abusing its monopoly position because the App Store is the only way for users to download apps on their iPhones or iPods.

But on Wednesday, Apple announced a step towards resolving the complaint, at least for new app makers. The company said it would reduce the App Store commission rate to 15% for software developers with less than 1 million annual net sales on its platform.

However, the decision may be more of a PR stunt than a major step towards giving up its position as the gatekeeper. 

Currently, Apple charges a 30% commission on the total price of paid apps and makes app purchases through the App Store. While the change to 15% will not affect a giant like Epic Games, the low commission rate helps startups.

The so-called “App Store Small Business Plan” will launch on January 1st. It did not receive $ 1 million in net sales for any of the apps in the store, as well as new apps launching in the App Store. 

There is pressure

Governments around the world have increased their research into Apple’s monopoly business practices over the past year.

In October, the House Judiciary Subcommittee on Antitrust released a report accusing the technology behemoth of making “super-ordinary profits” through the App Store.

Therefore, the company’s decision to reduce the commission for small and growing applications to 15% may do more to satisfy lawmakers than expanding App Store equity.

The new program will only apply to small developers earning less than $ 1 million a year on all their applications after Apple charges. Once a developer exceeds this limit, Apple’s rate will change to 30%.

The App Store currently has 1.8 million apps. Some turn a profit. 

According to a 2019 survey, the top 1% of app makers make up 93% of revenue in both the App Store and competitor Google Play Store.

This suggests that even with low commissions, other forces are at work to prevent the rise of a given utility. 

However, expanding access to emerging applications is a healthy start.

As for epic games, the new plan will not affect its relationship with Apple. Returning to the Fortnight App Store, it would collect more than $ 1 million for reduced commissions.