Under pressure, Apple cuts commission for small app developers

Posted on Nov 18, 2020 at 12:01 p.m.Updated Nov 18, 2020, 2:02 PM

It’s a big step for Apple, although not everyone will necessarily have the same appreciation. On Wednesday, the Californian group announced a major change to its criticized system of commissions on transactions within the App Store. As of January 1, small developers will only be charged 15% of payments made within their applications, and no longer 30% as was the norm until now.

Apple said the new rule would apply to all developers who earned less than $ 1 million – after commission – in the previous fiscal year, across all of their apps. The new rate will then be applied to them throughout the following year. And they won’t revert to the full 30% rate until one year after they cross the $ 1 million threshold.

As usual, Apple has been stingy with numbers. The group refuses to say how many developers will be affected, what percentage of the 1.8 million applications available on the App Store will be affected or what is the extent of the financial sacrifice that this represents for the Cupertino company.

Apple simply assures that it made this decision to help SMEs in the context of the global health crisis of 2020. Many small structures must embark on digital sales or reorient their distribution to survive. Apple therefore contributes its share. And he ensures that this redistribution in favor of small developers will generate more applications, of better quality – which will benefit him in the long run.

Antitrust investigations

What the group does not say is that the unprecedented round of criticism it received in 2020 probably played a determining role in its desire to change its practices. Last June, Brussels notably struck a blow by announcing the opening of two antitrust investigations against Apple, including one specifically on the App Store.

The measure followed several complaints from major publishers, including Swedish Spotify, who accused Apple of anti-competitive behavior. Not only does the Californian group not allow other application stores on iPhone and iPad, but it imposes its payment system – and the famous commission – for all transactions within its ecosystem and even denies developers display a link to an external payment system.

And the last straw, for Spotify like many others, is that Apple is launching its own competing services (Apple Music, Apple TV +, Arcade, Fitness + …) which do not have to pay such a percentage of their turnover to a third, which can help make them more attractive and profitable.

Combat de titans

In the United States, the sling is not less. The group is also in the sights of the authorities. The Justice Department and Congress are looking into possible anti-competitive practices by the group led by Tim Cook. And this summer, a star publisher’s fight against the “Apple tax” turned into a standoff in the public arena. Epic Games, which develops the Fortnite video game, was banned from the App Store for trying to get around the rules by offering its own payment system. The clash of the two titans continues in court.

But in the wake of this unprecedented clash, heavyweights like Facebook or Microsoft – unhappy at not being able to offer their video game streaming services on the App Store – joined the concert of critics. At the end of September, a “Coalition for App Fairness” was even created, bringing together 45 publishers and organizations, including Epic Games, Deezer, Spotify, Match Group but also Le Geste (which brings together French editors of online services and content), to federate oppositions in Europe and the United States.

New front in advertising

To make matters worse, Apple put fuel on the fire at the start of the school year. First by unveiling Apple One, a super-bouquet of its main services at reduced prices that many have seen as a snub to the competition authorities. Then by announcing strong limitations to advertising tracking in iOS apps – the other great way to get paid for developers.

The measure was immediately denounced by advertisers, but also by associations for the defense of online freedom such as NOYB – the collective led by Austrian lawyer Max Schrems – who this week denounced the fact that Apple was exempting itself for its own pre-collection consent services required for third-party publishers.

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