Apple reduces App Store tax to 15% for 2021… but not for everyone

Apple has made a significant change to the way it charges its commission for paid apps and in-app purchases made via the App Store. The App Store Small Business Program will launch at the beginning of 2021, and those who qualify will only be required to pay a 15 percent commission—down from the 30 percent “Apple Tax”.

In an official statement, the Cupertino-based company said that the change would benefit the “vast majority” of developers who have apps on the App Store. There are, of course, requirements to join the program—most notably, a revenue limit of USD 1 million (~RM4.1 million) for the previous calendar year.

Apple also outlined the basic participation criteria for the App Store Business Program:

  • Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission. 
  • If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year. 
  • If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.

Spotify, Epic Games, and big-hitters left out

Despite the “vast majority” mentioned by Apple (and the fact that most developers on the App Store reportedly don’t pay any commission at all), there are still big-hitters that will be required to pay the full 30 percent Apple Tax.

Epic Games, who has had a drawn-out, (very) public argument with Apple over antitrust issues, told The Verge:

“This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally.

“By giving special 15 percent terms to select robber barons like Amazon, and now also to small indies, Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30 percent tax on most in-app purchases.”

– Epic CEO Tom Sweeney (via The Verge)

Spotify, who also had similar issues with App Store policies, reportedly warned regulators to ignore the “window dressing” when referring to the changes:

“Apple’s anti-competitive behavior threatens all developers on iOS, and this latest move further demonstrates that their App Store policies are arbitrary and capricious. While we find their fees to be excessive and discriminatory, Apple’s tying of its own payment system to the App Store and the communications restrictions it uses to punish developers who choose not to use it, put apps like Spotify at a significant disadvantage to their own competing service. Ensuring that the market remains competitive is a critical task. We hope that regulators will ignore Apple’s ‘window dressing’ and act with urgency to protect consumer choice, ensure fair competition, and create a level playing field for all.”

(via The Verge)

Many see Apple’s latest move to be a response to recent anti-trust probes, but Apple claims that the App Store Small Business Program is designed to “help small businesses and independent developers”, particularly amidst pandemic-related global economic issues.

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Meanwhile, there are those who are happy with the reduced cut to 15 percent. According to the BBC, app creator Benjamin Mayo said that he—along with other independent developers—see this as a good thing. However, he noted that big-hitters would probably see their exclusion as unfair.

So, what do you think? If you’re a developer, and you’re affected by the new changes, share your thoughts on the topic in the comments below.

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