Apple Cuts App Store Fees Following Clash With EU Commission
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Apple has just unveiled new business terms for app distribution in the European Union, aiming to close at least part of its long-running conflict with the European Commission over the Digital Markets Act (DMA). The core elements are a single set of rules for all developers, lower commission rates, the end of the controversial Core Technology Fee, and additional child safety requirements. Developers can sign the new terms immediately, and they are set to take effect on October 1. The European Commission has not commented so far.
Until now, app providers in the EU had to choose between two frameworks: either Apple’s global terms with distribution exclusively through the App Store, or the EU-specific alternative terms that opened up access to alternative marketplaces. That split disappears. A single contractual framework will cover the App Store, alternative marketplaces and web distribution alike. It also means Apple’s in-app purchase system can be offered inside apps distributed outside the App Store.
Core Technology Fee becomes Core Technology Commission
The biggest structural change concerns the Core Technology Fee, a per-install charge that kicked in above one million first annual installs and drew heavy criticism across the industry because it applied even to free apps generating no revenue. It is being replaced by the Core Technology Commission, a flat five percent commission on digital transactions in apps distributed outside the App Store. The initial acquisition fee and the store services fee are being dropped as well.
Apple is also adjusting its commission rates, which now depend on the distribution channel and the payment method used. Reduced rates apply to participants in the App Store Small Business Program, the Mini Apps Partner Program and the Video Partner Program, as well as to auto-renewing subscriptions after their first year.
| Distribution and payment route | Standard rate | Reduced rate (programs) |
|---|---|---|
| App Store with Apple In-App Purchase | 26% | 15% |
| App Store with alternative payment processing in the app | 20% | 10% |
| App Store with link-out to complete the purchase | 15% | 10% |
| Distribution via alternative marketplaces or the web | 5% (Core Technology Commission) | 5% |
For many providers this amounts to relief compared with the classic model, under which Apple retained up to 30 percent. Another change is that Apple’s own payment system and alternative payment options may now be offered side by side within the same app, which was previously not permitted in the EU. Developers who opt for a combination must stick with it for twelve months, according to Apple. Not offering Apple in-app purchases at all is also an option.
Child safety and access to alternative marketplaces
Together with the Commission, Apple has agreed on additional safeguards for minors. Apps in the Kids category will no longer be allowed to link out to external payment websites. For users under 13, linking out to web payments is prohibited entirely, and for users under 18, alternative payment routes must include a parental gate that involves a parent or guardian in the purchase. In member states with stricter consent rules, the measures are to scale accordingly.
Apple is also widening the pool of companies eligible to operate an alternative app marketplace or distribute apps via the web. Qualifying criteria now include meeting a moderate financial stability threshold as scored by Dun & Bradstreet, being publicly traded or owned by a publicly traded company, having received venture funding from an established investment firm, or having completed a financial audit by a licensed accountant. Government entities, educational institutions and nonprofits are eligible as well. Apple is sticking with Notarization, the baseline technical review every app distributed outside the App Store has to pass. Whether the installation hurdles for alternative app stores will be lowered was left open.
Background: why the two sides settled
The DMA obliges companies designated as gatekeepers to open their platforms to competitors. Apple resisted from the outset, arguing that alternative distribution channels would degrade security and the user experience on iPhone and iPad, and responded with a complex fee structure. The Commission read that as an attempt at circumvention and opened proceedings against the company. A finding that Apple had breached the anti-steering rules followed, along with a 500 million euro fine because developers were not free to point users to cheaper offers outside the App Store. Meanwhile, the anticipated boom in alternative marketplaces never materialised.
Both sides therefore had reasons to look for a negotiated outcome. Apple faced periodic penalty payments of up to five percent of average daily worldwide turnover for continued non-compliance, on top of an increasingly opaque rulebook that was causing friction among its own developers. The Commission, for its part, is under pressure because DMA enforcement has so far produced mostly fines, most recently 890 million euros against Google, but little visible competition in the app business. The talks ran for more than a year and reportedly took place on a near-weekly basis toward the end, latterly with the personal involvement of outgoing Apple CEO Tim Cook. The models Apple previously negotiated with regulators in Brazil and Japan served as templates.
Whether the deal signals movement on the remaining points of dispute is an open question. Interoperability with third-party devices remains unresolved, as does the timing of features such as the AI-powered version of Siri and iPhone mirroring via macOS in the EU. Apple critics like Epic Games and Spotify are likely to scrutinise the new conditions closely. Apple publishes the details on its developer page on the DMA.
