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Apple is slashing its App Store payment fees in half for smaller developers, to 15% from 30%

Business Insider logo Business Insider 11/18/2020 insider@insider.com (Isobel Asher Hamilton)
Tim Cook wearing a suit and tie: Apple CEO Tim Cook. Karl Mondon/Digital First Media/The Mercury News via Getty Images © Karl Mondon/Digital First Media/The Mercury News via Getty Images Apple CEO Tim Cook. Karl Mondon/Digital First Media/The Mercury News via Getty Images
  • Apple on Wednesday announced it's reducing the commission it takes on App Store in-app purchases, to 15% from 30%, for small developers starting January 1.
  • Apple's price reduction will apply to developers that made up to $1 million in revenue over the past year.
  • Apple has been engaged in a bitter fight with major developers such as Spotify and Epic Games over its App Store commission. Its rules have attracted antitrust scrutiny.
  • Visit Business Insider's homepage for more stories.

Apple just made a surprise move as it feuds with app developers.

Apple on Wednesday morning announced it was changing its App Store policies to halve the commission it takes from in-app payments for smaller developers.

The cut, to 15% from 30%, will apply to developers whose apps generated up to $1 million over the past year.

"We're launching this program to help small-business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love," Apple CEO Tim Cook said in a press statement.

The cut is scheduled to take effect January 1.

The commission has sparked a bitter fight between Apple and developers over its rules on in-app purchases, which have attracted antitrust scrutiny in both the US and Europe.

The rules require developers to use Apple's payment system for in-app purchases, such as a Spotify Premium subscription. Apple then takes a 30% cut of every transaction.

Major developers including Spotify, the Tinder owner Match Group, and Epic Games have fought with Apple over its in-app payments rules.

They accuse Apple of abusing its strict control over which apps can function on iOS devices, arguing that it is especially anticompetitive if Apple then decides to launch competing products, such as its music-streaming service, Apple Music.

In September, developers formed a group called the Coalition for App Fairness to try to force Apple to get rid of the charge. Apple's announcement is unlikely to placate larger developers, which don't qualify for the price reduction.

The announcement also doesn't represent a huge financial hit for Apple. Per analytics provided to The New York Times by Sensor Tower, while the change will affect 98% of companies that pay a commission to Apple, their revenue combined totaled only 5% of App Store revenue generated last year.

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