Apple Reduces Commission to 10% in EU: Two New Fee Structures for Developers and Which to Choose
- What Was Before
- Two New Agreement Options
- Option 1: Alternative Terms Addendum for Apps in the EU
- Option 2: StoreKit External Purchase Link Entitlement (EU) Addendum
- Service Tier System
- Key Restrictions and New Obligations
- Who Benefits from Changes
- Impact on Users
- Practical Conclusions
- Contact our lawyer for more details
In response to European Commission demands to comply with the Digital Markets Act (DMA), Apple has fundamentally reconsidered its policy for developers in EU countries. As we previously wrote, the European Commission opposed Apple, demanding the opening of alternative stores and sales channels for iOS.
Now, instead of uniform rules, the company offers two different agreements with varying monetisation terms and restrictions. This decision became a compromise between European regulators' demands and Apple's desire to maintain control over its ecosystem.
What Was Before
Prior to introducing new rules, Apple employed a rigid model: all developers were obliged to use exclusively the App Store payment system, paying a standard commission of 30% on all transactions.
The only exception was the Small Business Programme for small businesses, which reduced the commission to 15% for developers with annual revenue up to $1 million.
Any attempts to direct users to alternative payment methods were strictly prohibited. Developers couldn't even mention the possibility of purchasing subscriptions or content outside the app at lower prices. This policy was criticised for years as anti-competitive, but it drew particularly sharp objections from European regulators.
Two New Agreement Options
Apple now offers developers a choice between two fundamentally different approaches. The first option allows maintaining access to the App Store payment system, but with reduced commission and the ability to simultaneously use alternative channels. The second option completely excludes the use of App Store payments but offers a different fee structure.
Option 1: Alternative Terms Addendum for Apps in the EU
This option gives developers the right to choose between two monetisation models for each EU country separately. In some countries, one can use App Store payments at reduced commission; in others, direct users to external platforms. It's important to understand: within one country, you cannot offer users both App Store payments and external systems simultaneously—you need to choose one thing for each storefront.
If you choose App Store payments for a specific country:
- Commission: 10%/17% (instead of standard 15%/30%)
- + 3% payment processing fee
- Total: 13%/20% on each transaction
If you choose external payments for a specific country:
- 2% Initial Acquisition Fee (first 6 months after installation)
- + 5% or 13% Store Services Fee (depending on tier)
- Total: 7% or 15% on each transaction
Additionally in any case:
- Core Technology Fee: €0.50 for each installation over 1 million per year
Main advantage: you can choose different models for different EU countries (e.g., App Store payments in Germany, external payments in Poland).
Important to note that the reduced App Store commission doesn't mean automatic savings. A mandatory 3% processing fee is added, which in total may constitute 13-20% instead of the original 15-30%. However, this may still be beneficial for developers planning to actively use alternative channels.
Option 2: StoreKit External Purchase Link Entitlement (EU) Addendum
The second option represents a complete rejection of Apple's payment system across all EU countries. Developers choosing this path cannot use App Store payments anywhere in Europe, even at preferential rates, but receive a more predictable fee structure for external payments.
Terms of the second option:
- 2% Initial Acquisition Fee (first 6 months after installation)
- + 5% or 13% Store Services Fee (depending on tier)
- + 5% Core Technology Commission (permanent commission on transactions)
- Total: 12% or 20% on each transaction
Main restriction: cannot use App Store payments at all, only external payment systems across all EU countries.
This option may be attractive for developers who already have their own payment infrastructure and want uniformity across all EU countries, ready to take full responsibility for payment processing and customer support. However, total fees may be higher due to the additional 5% Core Technology Commission.
Service Tier System
Both options provide a choice between two service levels, adding another layer of complexity to decision-making. Store Services Tier 1 is mandatory for all applications using external payments and provides basic capabilities for a 5% service fee. This includes app distribution, basic security measures, and elementary analytics.
Store Services Tier 2 is optional and offers extended functionality for a 13% service fee (10% for Small Business Programme participants). This tier includes recommendation personalisation, advanced marketing tools, detailed usage analytics, and other premium platform capabilities.
Developers can switch between service tiers once per quarter for each application and each storefront separately. This provides certain flexibility in adapting to changing business needs.
Key Restrictions and New Obligations
New rules impose significant restrictions on developers. The main one concerns the impossibility of simultaneously using App Store payments and alternative systems within one EU country. This means that if a developer decides to use external payments in Germany, they cannot offer users in Germany the option to pay through the App Store—you need to choose one thing for each storefront. Different models can be chosen in different EU countries (but only within the first agreement option).
When transitioning to external payments, developers take full responsibility for customer support, processing returns, subscription management, and tax compliance. Apple will no longer assist in resolving disputes or technical problems related to payments. This is particularly critical for small teams that previously relied on Apple's infrastructure.
Monthly reporting obligations are also introduced. Developers must provide Apple with detailed reports on all transactions within 15 days after each month's end. Non-compliance with this requirement may lead to fines or programme exclusion.
Who Benefits from Changes
The greatest benefit from new rules may be gained by large developers with their own customer base and developed payment infrastructure. They'll be able to significantly reduce their costs, especially when working with subscription services, where commission savings may amount to millions of dollars per year.
Medium-sized developers will find themselves in the most complex position. On one hand, they gain more monetisation opportunities; on the other, they face the need to create their own support infrastructure and payment management. For many, this may prove an insurmountable task.
Small developers participating in the Small Business Programme retain their benefits within both models. For them, new opportunities may become a way to experiment with various monetisation approaches without significant additional costs.
Impact on Users
For end users, changes bring both positive and negative consequences. They may potentially gain access to lower prices for subscriptions and digital goods, as developers can save on Apple's commission. However, they'll also lose some conveniences of Apple's ecosystem, such as centralised subscription management, Family Sharing for external purchases, and unified transaction history.
Users will also face the need to share payment data with more third parties, potentially increasing security risks. Apple warns about this through mandatory system notifications when transitioning to external payments.
Practical Conclusions
Choice between options should be based on careful analysis of a specific application's business model.
The first option (Alternative Terms) is suitable if:
- You want to maintain flexibility of choice between App Store and external payments by country
- You plan to test different models in different markets
- You have fewer than 1 million installations per year (avoiding Core Technology Fee)
The second option (StoreKit External) may be beneficial if:
- You're ready to completely abandon App Store payments and have infrastructure to replace it
- You want a uniform model across all EU countries
- Your costs for 5% Core Technology Commission are less than potential savings
It's important to remember that transitioning to new models requires not only technical changes but also serious business process restructuring. Developers need to prepare for increased operational load and create teams for customer support, financial reporting, and regulatory compliance.
The Arbitration & IT Disputes team is ready to assist you in resolving matters related to store operations.
Authors: Kamal Tserakhau
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