February 24, 2024

Apple Cuts App Store Fees, to Allow Rival App Stores in Europe

For the first time in the company’s history, Apple has announced that it would allow rival app stores to be used on Apple devices purchased in the EU.

This comes as a part of major changes to how the tech giant handles apps in Europe, which also included significant cuts in its App Store fees.

The updates, which were announced on Thursday, are a response to the new regulations that are set to take effect in March this year.

The changes won’t apply in the UK – at least just yet. However, the Digital Markets Bill which is currently passing through the UK parliament will likely bring Apple’s practices under scrutiny.

Cheaper Fees and Greater Flexibility: A Win for Users and Developers

The shift is essentially one of the most impactful changes to the company’s app business since the App Store was first launched, 15 years ago.

With Apple strongly stifling competition from potential rival app stores, it formed the basis of the tech giant’s ecosystems. Apple currently allows you to only download apps from its proprietary store – a rule that it claims to enforce to protect the users’ security.

However, there has been mounting pressure against the policy, with Apple being accused of creating a monopoly.

Epic Games recently brought Apple to court over forcing customers and developers to go through its own channels and charging developers a hefty processing fee of up to 30%.

The move led Apple to update its policy and start allowing developers to offer alternate payment channels – while still charging a 27% commission. Spotify had recently criticized Apple for this move.

With the official App Store from Apple being the only app store that could be used on its devices, you did not have much choice in how you installed apps.

Developers who don’t wish to pay the hefty fees or do not meet Apple’s standards could not sell their products to the millions of Apple users either. This is now set to change in Europe once the updates take effect.

Apple also announced the transaction fees for in-app purchases will be slashed from 30% to 17%.

For developers who are eligible for certain discount programs and are currently charged a 15% commission on in-app transactions, the fee would be set at 10%. This is indeed yet another massive change, addressing one of the key issues raised against Apple in recent times.

The announced updates go on to show how EU policymakers succeeded in forcing Apple to change its business practices.

The tech giant has also announced that developers will soon be able to offer alternative payment methods without having to pay a commission. No fees would be collected from apps distributed through rival app stores either, the company said.

Developers choosing to benefit from the new fee structure and capabilities will instead have to pay Apple a fee of 0.50 euros for every installation following the first 1 million installs in a year.

Based on this requirement, less than 1% of the developers in the EU would have to pay this fee, Apple mentioned.

Other Changes for Apple Users in the EU

Besides the reduced fees and the option to use alternative app stores and payment methods, Apple also announced other changes that will be coming to the EU.

Once iOS 17.4 is rolled out, developers will be able to access the tap-to-pay chip that comes embedded in iPhones. This would enable them to create alternative iOS mobile wallet apps for contactless payments.

EU users opening Safari after downloading the update will see a menu of alternative browsers like Chrome and Firefox. Though Apple’s App Tore will continue to be initially set as default, you will gain the ability to set a third-party app store as your default choice.

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