Many developers welcomed the announcement of Apple that it is lowering its App Store commission to 15% for apps that do not reach the $1 million-dollar mark in sales.
Apple's new announcement about its policy change as regards the lowering of App Store commission from 30% to 15% comes as part of the company's initiative called "App Store Small Business Program." Under this program, developers whose total apps earn less than $1 million annually can expect to pay only 15% in App Store commission instead of the customary 30%.
If the apps hurdle the million-dollar mark during the year, Apple will implement the full 30% rate until the end of the year. However, if the apps' earnings fall below this mark, developers can apply for the program next year so they can be covered. Apple said that its initiative of lowering App Store commission from 30% to 15% will benefit many developers whose apps earned less than $1 million per year, though the company did not specify as to how many developers will be covered by such a program.
Apple is launching a new program in January that will cut App Store commissions to 15% per year, for developers and businesses paid less than $1 million a year by Apple.#Apple | #AppStore pic.twitter.com/HVQChxbBIv — Apple News & Updates (@AppleUpdateNews) November 18, 2020
Companies and developers have complained about the 30% App Store commission set in place by Apple for app sales. In fact, it was among the issues raised by Epic Games in its lawsuit against Apple. The Cupertino-based tech giant banned Epic's popular game Fortnite for allegedly attempting to circumvent the in-app purchase system that Apple instituted in its App Stores. Epic Games did not comment on the latest move of Apple in lowering its App Store commission from 30% to 15% for apps that did not reach the $1 million-dollar mark in annual sales.
Spotify is also among the companies that aired grievances against what they call Apple's "App Store Tax." The music streaming company also argued that Apple's own Apple Music services, which also offer similar streaming services, have an unfair advantage over Spotify. It is not clear whether the music streaming company will apply for Apple's program and take advantage of the company's offer of lowering its App Store commission from 30% to 15% as it did not disclose whether Spotify apps reach or is shy of the $1 million-dollar mark in annual sales.
There are instances, however, where Apple reportedly exempted some developers from paying 30% in App Store commissions. Rumors say that Amazon Prime Video is exempt from paying additional charges on in-app purchases. Apple's move in lowering its App Store commission from 30% to 15% for apps that earned less than $1 million per year is set to take effect starting January 1, 2021. You can check out Apple's "App Store Small Business Program" initiative and their App Store commission policy change announcement on their website.
