RESEARCH TRIANGLE PARK – Apple is cuttingf its fees for sales through its app store to 15% from 30% as part of a new program announced Wednesday.
However, the reduction is only for firms with sales that generate less than $1 million.
That means the cut doesn’t apply to firms such as Cary-based Epic Games which has filed an antitrust suit against Apple over the 30% commission that Epic CEO Tim Sweeney calls a “tax.”
“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. 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,” said Tim Cook, Apple’s CEO, in the new program announcement.
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“The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”
The program launches Jan. 1.
Highlights of the program:
- Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.
- If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.
- If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.
- The App Store’s standard commission rate of 30 percent remains in place for apps selling digital goods and services and making more than $1 million in proceeds, defined as a developer’s post-commission earnings. Earlier this year, an independent study by the Analysis Group found that Apple’s commission structure is in the mainstream for app distribution and gaming platforms.
More details will be released in early December, Apple said.
