Apple is changing the way it does business with app developers in the European Union after working with the European Commission to resolve disagreements over App Store business terms and alternative app distribution.
The company says the new system will simplify the rules by moving every developer distributing apps in the EU to a single set of business terms. Developers can begin signing the new agreement now, with the changes scheduled to take effect on October 1.
One of the biggest changes is the replacement of Apple’s Core Technology Fee with a new Core Technology Commission. Instead of charging developers a per-install fee once an app reaches a certain level of scale, Apple will take a 5 percent commission on digital transactions made through apps distributed outside the App Store. The new terms also remove the initial acquisition fee and store services fee.
Apple is also changing its commission rates depending on how developers distribute their apps and process payments. Apps distributed through the App Store that use Apple’s In-App Purchase system will generally face a 26 percent commission. However, most developers participating in programs such as the App Store Small Business Program, Mini Apps Partner Program or Video Partner Program will pay 15 percent, as will auto-renewing subscriptions after their first year.
Developers using alternative payment processing inside App Store apps will pay a 20 percent commission, while eligible developers in the reduced-rate programs will pay 10 percent. Apps that link users to the web to complete purchases will carry a 15 percent commission, dropping to 10 percent for developers covered by the applicable programs. Apps distributed through alternative app marketplaces or directly from the web will be subject to the 5 percent Core Technology Commission.
Apple is also changing how developers can use alternative payment systems. Under the new EU terms, developers will be able to offer Apple’s In-App Purchase system alongside alternative payment options, something that was not previously allowed in the region. Apple says developers will have to follow presentation requirements intended to give users a clear and consistent purchasing experience.
Developers distributing apps in the EU will also have to choose which payment options they want to support, including Apple In-App Purchase, alternative payment processing within the app, web-based purchases, or a combination of these options. Once selected, those choices must remain in place for 12 months.
The company is also introducing additional protections for children when alternative payment methods are used. Apps in the Kids category on the App Store will not be allowed to include links to websites where transactions can be completed. Apple says this is intended to reduce the risk of scams and fraud targeting children.
For users under 18, App Store apps that use alternative payment processing or direct users to websites for transactions will have to include a parental gate. This will require younger users to involve a parent or guardian before completing a purchase. Apps cannot link to transaction websites for users under 13, with the protections adjusted in EU countries where parental consent requirements apply to children older than 13.
Apple is also expanding eligibility for companies that want to operate alternative app marketplaces or distribute apps directly through the web in the EU. Companies can now qualify by meeting a moderate financial-stability requirement measured by Dun & Bradstreet, being publicly traded or owned by a publicly traded company, receiving venture funding from an established investment firm, completing a financial audit by a licensed accountant, or operating as a government entity, educational institution or nonprofit organization.
Web distribution remains available only in the European Union and does not have the same marketplace operator oversight associated with the App Store. Apple says this creates additional risks because a malicious distributor could potentially operate for an extended period before being detected. As a result, apps distributed through the web will still have to pass Apple’s Notarization process, which provides a basic review focused on functionality and protection against serious security threats.
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Apple says it is providing developers with additional resources explaining the new choices and requirements under the updated EU system through its Apple Developer Support resources.
