Apple's official announcement: Developers are no longer forced to pay 30% app store commissions!

On September 2, Apple's official website issued a statement:

App Store is about to usher in an update. This update will allow developers of "reader" apps to provide a link to their website within the app so that users can set up or manage accounts. This is an agreement reached between Apple and JFTC, but Apple will extend this change to all reader apps in the global App Store.

According to Apple's definition of "reader" applications, this change applies to applications such as magazines, newspapers, books, audio, music, and video.

For a long time, Apple has charged developers up to 30% commission on each transaction, and forced the use of an internal payment system to collect a portion of the transaction fee. Globally, Apple’s total revenue in the last fiscal year was US$274.5 billion, of which service business revenue including app stores was US$53.8 billion.

In fiscal year 2020, Apple's service business revenue was US$53.768 billion, a year-on-year increase of 16.15%, accounting for 19.59% of revenue.

And this statement means that many developers will no longer need to pay Apple up to 30% of the app store commission, this change will take effect early next year. Prior to this, Apple will update its guidelines and review process to ensure that Reader App users can continue to enjoy a safe experience on the App Store.

Controversy over expensive commissions continues

In March 2019, the Swedish music streaming platform Spotify filed an antitrust complaint against Apple in the European Union, accusing Apple of charging developers a 30% commission.

On April 30, 2021 local time, the European Commission announced that the European Commission had sent a statement of objection to Apple. The European Commission questioned that Apple had abused its dominant position in the distribution of music streaming applications in the App Store, thereby distorting competition in the music streaming market. As a result, the European Union officially launched an antitrust lawsuit against Apple for the first time.

Last year, Apple and Epic Games continued to dispute the delisting of "Fortnite" and the App Store in-app purchase policy. Epic Games is a world-renowned game development company. Direct payment methods other than in-app purchases were removed by Apple for violating App Store rules. Epic Games believes that Apple has abused its dominant market position in the iOS system and imposed a 30% transaction commission on application developers, and users can only use expensive in-app purchase payment methods. Epic requested the court to issue an initial injunction prohibiting Apple's above-mentioned business practices.

Epic’s preliminary ban has only one purpose: to provide another payment channel, allowing consumers to enjoy lower prices.

On Tuesday, the South Korean National Assembly passed a bill prohibiting the operation of App stores such as Apple and Google to force App developers to use their designated payment systems. Among the legislators participating in the meeting, 180 (188 in total) voted in favor.

The bill will make South Korea the first country to impose restrictions on the payment policies of Google and Apple. The law also gives the South Korean government the power to mediate payment, cancellation and refund disputes in the app market.

Companies that violate the regulations may be fined up to 3% of their income in South Korea by the Communications Commission of South Korea's regulator.

Choose "Concession" due to pressure?

Perhaps because of antitrust pressure and increasing disputes, Apple made concessions:

In November 2020, Apple announced the App Store small business plan, and the percentage of developers with annual revenue of less than US$1 million will be reduced to 15%.

On August 27th, Apple announced on its official website that it would make a number of improvements to the App Store as part of a preliminary settlement agreement for the US developer's class action lawsuit. Improvements include that developers can introduce users to their purchase options outside of the App Store.

In addition, in March 2021, the Arizona House of Representatives also passed a bill that requires app stores with more than 1 million downloads per year not to designate a particular application payment system as an exclusive method, or to use other payment methods. Retaliated against by application developers or users.

At present, the draft of the EU's "Digital Market Act" has clearly responded to this, strengthened the supervision of the market behavior of digital giants, solved the problem of market blockade, clearly protected the legitimate rights and interests of users and ensured the realization of fair market competition.