Apple Unveils New App Store Fee Structure for EU Amid Regulatory Pressure
Apple has announced significant changes to its App Store commission structure in the European Union, introducing a new “Core Technology Commission” that will apply to apps distributed through third-party app stores and the web. This move aims to comply with the EU’s Digital Markets Act (DMA) and resolve ongoing disputes with regulators.
Under the revised model, which takes effect on October 1st, Apple will charge a 5% commission on in-app purchases made through alternative app stores. This represents a substantial reduction from the historical 30% or 15% rates previously applied. For apps utilizing their own payment processing systems, the commission will be 20%, down from the standard 26% for those using Apple’s integrated payment system. Apps that direct users to external websites to complete purchases will face a 15% commission. Certain fees can be further reduced by participating in specific Apple programs.
This updated fee structure replaces a more complex system that Apple initially proposed last year. The App Store’s long-standing commission model has faced increasing scrutiny worldwide, with critics arguing that Apple’s control over iOS app distribution constitutes a monopolistic practice that burdens developers and consumers. Apple, in turn, has maintained that its stringent App Store policies are crucial for ensuring user trust, safety, and security, particularly in preventing the proliferation of inappropriate or malicious applications.
The EU’s Digital Markets Act, enacted in 2022, mandates that “gatekeepers” like Apple must open their platforms, including the App Store and services like Siri, to third-party access. While the DMA aims to foster greater competition and consumer choice, its implementation has been a point of contention between Apple and the European Commission. Apple has previously faced substantial fines in Europe related to these disputes.
While several regions now mandate that Apple permit third-party app stores for iPhone apps, Europe stands out as the only jurisdiction where users can download iPhone software directly from the web. Japan and Brazil have also implemented similar requirements for third-party app marketplaces. In contrast, Apple is actively resisting efforts in the United States to allow users to link out to web-based payments, a stance central to its ongoing legal battles with Epic Games.
Apple asserts that its latest proposal addresses the European Commission’s concerns and has collaborated with the EC to integrate child safety measures, including enhanced parental controls for certain in-app purchases.
The App Store is a significant revenue generator for Apple, contributing substantially to its highly profitable Services division. However, in its most recent quarterly earnings report, the App Store was notably absent from the list of top growth drivers for services, a departure from its consistent performance since 2023, according to a recent note from Morgan Stanley. Chief Financial Officer Kevan Parekh cited factors such as a slowdown in mobile gaming and other market dynamics impacting the App Store’s performance. “We also made some adjustments to the App Store business model in certain countries,” Parekh commented during a call with analysts in July, acknowledging the evolving landscape.
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