Apple lowers App Store fee for small developers but monopoly criticisms remain

Apple has said it will launch a programme cutting the commission it takes from app sales to 15 per cent for developers who make less than $1m annually through its iOS App Store.

The 'Small Business Program' follows legal action taken by Fortnite developer Epic Games, which in August accused Apple of following monopolistic practices for its App Store.

Currently, the iPhone maker takes a 30 per cent cut of most purchases made on the store with the commission dropping to 15 per cent for subscriptions that remain active for more than a year.

The new programme is designed to reduce the financial burden on smaller developers while maintaining the same cut taken as before for larger ones.

Epic Games said the move was “calculated” by Apple “to divide app creators and preserve their monopoly on stores and payments”.

“By giving special 15 per cent 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 per cent tax on most in-app purchases,” chief executive of Epic Games Tim Sweeney said.

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

“iOS and Android need to be fully open to competition in stores and payments, with a genuinely level playing field among platform companies, app creators, and service providers.

“That, and not gerrymandering the community with a patchwork of special deals, is the only path to a fair app marketplace.”

Spotify, which has also long complained the fee is unfair as Apple has its own music streaming app, said the change “further demonstrates that their App Store policies are arbitrary and capricious”.

In response to the criticisms, Apple said its rules apply evenly to developers and that the App Store provides an easy way to reach its huge base of users without having to set up payment systems in the 175 countries where it operates.

The move will affect a broad swath of developers, but it was unclear how big the financial impact would be for Apple.

Moody’s estimates that lower commissions will impact less than 1 per cent of Apple’s revenue and operating profit and it will benefit from the goodwill from thousands of small developers.

Apple is already being investigated by the EU Commission over such anti-trust allegations, looking into whether both the App Store and Apple Pay stifle competition.

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