Apple lowers App Store fees for most developers amid antitrust scrutiny

Apple says it’s cutting App Store fees for the “vast majority” of developers — a move one critic argues shows that “they’re sweating.”

Apple on Wednesday said developers that made up to $1 million in annual revenue on their apps in 2020 can pay a reduced commission of 15 percent on sales of “digital goods and services,” rather than the current level of 30 percent, beginning on Jan. 1, Bloomberg and The New York Times report. Bigger developers will still have to pay the 30 percent fee, however.

This App Store fee has faced heavy criticism from companies like Spotify and Epic Games, and antitrust regulators have examined Apple’s “‘gatekeeper’ role” in the distribution of apps through the App Store. Spotify argues that the fee gives Apple an “unfair advantage,” and Epic Games, the developer of the video game Fortnite, also sued Apple after getting itself kicked off the App Store for trying to get around the fee. In a subsequent lawsuit, Epic accused Apple of “unfair and anti-competitive actions.”

Apple CEO Tim Cook said cutting the fee would “help small business owners,” and the company cited an Analysis Group study it said found that its commission structure “is in the mainstream for app distribution and gaming platforms.” But critics from bigger companies blasted the move, with Basecamp CTO David Heinemeier Hansson arguing that the “only good thing about this cynical, Machiavellian ploy by Apple to split developers with selective handouts, is that it shows they’re sweating,” per the Times.

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Spotify also described the move as “window dressing,” while Epic Games CEO Tim Sweeney argued to the Times that Apple is “hoping to remove enough critics that they can get away with their blockade on competition,” but “consumers will still pay inflated prices marked up by the Apple tax.”

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Source:: The Week – Business


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