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Apple Is Reducing Its App Store Tax to 15 Percent for Most Developers

Any app developer with sales totaling less than $ 1 million annually will be eligible for the lower commission rate.

November 18, 2020 2 min read

This story originally appeared on PCMag

App developers will be celebrating today on news that Apple has decided to reduce its cut of App Store purchases from 30 percent to 15 percent.

As The Verge reports, Apple will reduce its cut to 15 percent on Jan. 1 next year as part of a new App Store Small Business Program. The majority of the over 28 million registered App Store developers will be eligible for the reduced rate, with the only known requirement being a developer must be earning less than $ 1 million in sales annually. However, developers will need to apply to the program and more requirements may be announced when comprehensive details are revealed in early December.

Related: Apple Suspends Key Manufacturer for Exploiting Student Workers

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love, “said Apple CEO Tim Cook. “The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward – helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives. “

Apple has been facing growing pressure to reduce the percentage it takes from every app sale and in-app content purchases. Most of that pressure has come from Epic Games, which added a direct payment option to its Fortnite iOS app, subsequently saw Fortnite removed from the App Store for violating the rules, and proceeded to take legal action against Apple. Epic will likely see today as a clear sign it won the argument, but the fact Apple put a $ 1 million cap on sales means Fortnite won’t qualify for the reduced rate.

All eyes will now be on Google to see if and how it reacts with the commission taken on Play Store app sales. Will we see a similar reduction made to help support small businesses?