Apple Reduces App Store Commissions to 15%

Apple Reduces App Store Commissions to 15% 1
| Nov 18, 2020
Apple has announced a new measure to cut its commission from App Store transactions in half via a Small Business Program.

The tech giant currently takes a 30% commission on all app purchases and microtransactions carried out on its platform. Now, developers who make less than $1 million annually can qualify for a reduced 15% commission rate, for as long as they stay below that threshold.

Apple Ceo Tim Cook Announced Plans To Take Less Commission From Small App Store Developers Next Year.
Apple CEO Tim Cook announced plans to take less commission from small App Store developers next year. (Axios)

The new program will begin January 1, 2021. It is intended to give the App Store’s smaller developers a boost, and Apple believes it “will benefit the vast majority of developers who sell digital goods and services on the store.”

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world,” said Apple CEO Tim Cook. “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.”

CNBC estimated that the App Store paid out $35 million from app transactions to developers last year, and had paid $155 billion in total since the service launched in 2008.

The move comes in the middle of a long dispute between Apple and Fortnite developer Epic Games, who object to the 30% commission rate. Epic claimed, in a court filing last month, that Apple “has no rights to the fruits of Epic’s labor.” However, an Apple-commissioned study this summer found 30% is a virtually standard going rate across the industry.