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Apple drops App store commission fee to 15% for some developers

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Apple is set to halve its longstanding 30 percent app commission fee for small developers and businesses.

The tech giant announced its new App Store Small Business Program that cuts the fee to 15 percent for those who generated less than $1 million sales in the previous calendar year.

The initiative is set to launch January 1, 2021, but will not apply to wildly popular apps and video games – these developers will still be charged 30 percent.

Big names such as Epic Games and Spotify, who are fighting the Apple tax, released statements following the announcement saying the program is a ‘window dressing to ‘preserve its monopoly.’

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Apple’s new App Store Small Business Program that cuts the fee to 15 percent for those who generated less than $1 million sales in the previous calendar year.

Epic CEO Tim Sweeney in a statement: ‘This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally.’

‘By giving special 15 percent terms to select robber barons like Amazon, and now also to small indies, Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30 percent tax on most in-app purchases.’ 

‘But consumers will still pay inflated prices marked up by the Apple tax.’ 

Epic and Apple’s feud started in August when the gamemaker attempted to bypass the 30 percent cut, which resulted in the two battling it out in court.

Big names such as Epic Games, maker of Fornite, and Spotify, who are fighting the Apple tax, released statements following the announcement saying the program is a ‘window dressing to ‘preserve its monopoly

A few months later, Spotify and Match Group joined Epic’s fight with a by forming the nonprofit Coalition for App Fairness.

Spotify released its take on Apple’s new App Store Small Business Program, saying it puts them at a disadvantage.

‘Apple’s anti-competitive behavior threatens all developers on iOS, and this latest move further demonstrates that their App Store policies are arbitrary and capricious,’ Spotify shared in a statement.

‘While we find their fees to be excessive and discriminatory, Apple’s tying of its own payment system to the App Store and the communications restrictions it uses to punish developers who choose not to use it, put apps like Spotify at a significant disadvantage to their own competing service. Ensuring that the market remains competitive is a critical task. ‘

‘We hope that regulators will ignore Apple’s ‘window dressing’ and act with urgency to protect consumer choice, ensure fair competition, and create a level playing field for all.’

The Coalition for App Fairness, which was formed in September, also released their take on Apple’s new program saying it ‘ignores fundamental flaws with the App Store,’ the statement reads. 

Spotify released its take on Apple’s new App Store Small Business Program, saying it puts them at a disadvantage. ‘Apple’s anti-competitive behavior threatens all developers on iOS, and this latest move further demonstrates that their App Store policies are arbitrary and capricious,’ Spotify shared in a statement

Apple plans to look at developers’ sales for 2020 to determine if they can take advantage of the program rolling out in January. The guidelines also state that developers who have yet to publish their apps on the store can still qualify for the lowered 15 percent fee

The group also shared other key points about Apple’s businesses practices, such as the tech giant owns the customer relationship and requires all developers use its payment processor.

‘The Coalition for App Fairness advocates for progress and meaningful change. Until Apple updates their policies to embrace App Store Principles and create a fair ecosystem, developers around the world will be in the same place they’ve always been,’ the group continued in its statement. 

The program, according to The New York Times, will affect about 98 percent of the companies that publish their apps on Apple’s App Store.

However, they accounted for less than five percent of App Store revenues last year, Sensor Tower told The New York Times. 

Apple plans to look at developers’ sales for 2020 to determine if they can take advantage of the program rolling out in January.

The guidelines also state that developers who have yet to publish their apps on the store can still qualify for the lowered 15 percent fee.

However, when developers surpass the $1 million threshold, their fee will be increased to the longstanding 30 percent.

But if they later fall under the amount, the commission cut will again be lowered. 

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