Apple has announced that it will cut the amount of commission it charges app developers. This is part of a new Small Business Program. Developers who earn less than $1 million a year will now pay 15 percent on all transactions, which is half the current rate of 30 percent. This begins on January 1st 2021, and Apple says it will apply to app sales and in-app purchases, and that it benefits the “vast majority” of developers. CEO Tim Cook said that “small businesses are the backbone of our global economy” and that the program will help them “write the next chapter of creativity and prosperity on the App Store.”
Any company making less than $1 million only pays 15 percent commission. When their fees hit that limit, the 30 percent commission rate will kick in for the rest of that year. If their future revenue falls back down below $1 million, they’ll automatically return to the cheaper fees.
Businesses making more than $1 million a year will see no change to their business with the 30 percent rate remaining in place. And Apple notes that the fees it takes are used to make a safe, secure app development and sales platform for developers and users.
Some developers feel the 30 percent cut is unfair. Fortnite developer Epic Games intentionally broke the App Store rules on in-app purchases in protest. In response, Apple banned Epic from the App Store until it complies with the rules. The courts will decide that one.
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