Apple announced today that businesses with revenue under a million dollars per year will only be charged 15 percent commission moving forward — a 50 percent cut from its usual fees. The new App Store Small Business Program, which will begin on January 1, 2021, is meant to “help small businesses and independent developers propel their businesses forward with the next generation of groundbreaking apps on the App Store.”
Apple says the program will benefit the “vast majority” of developers who use the App Store. So it’s a specialized program, but it’s also one that benefits almost everyone.
Though the development timeline of this program is unclear, it’s difficult not to read it as a reactionary measure in response to the ongoing feud between Fortnite developer Epic Games and Apple: Apple faces backlash after Epic brings up how unfair its commission policies are… Apple then slashes that commission rate for the majority of its developers… the conclusions write themselves.
Strangely benevolent — The new program is only for small businesses; massive companies like Netflix and Spotify will still pay their 30 percent dues to the Apple overlords. And once a small business hits $1 million in revenue, it’ll have to start doing the same.
Apple’s 30 percent cut has been a trademark of the App Store experience since, well, forever, really. The commission rate has been constant since the App Store’s first launch in 2008 — more than a decade of consistent income for Apple.
An Epic battle — This new program comes as something of a shock, given that context. Apple says it’s changing that standard commission rate for smaller businesses to help them financially as they start selling on the App Store — but the move is also a product of months of scrutiny over Apple’s pay cut.
After Epic tried skirting around the App Store rules earlier this summer by allowing users to make Fortnite purchases directly through the app, Apple kicked them off the platform entirely. Epic refused to budge, insisting that Apple’s policies are unfair to developers — and others soon took up that same rally cry.
It’s also important to keep in mind that Apple is currently under investigation for anti-trust violations. Apple’s monopolistic governing of iOS doesn’t exactly look good in that context; this benevolent move could curry some favor from those investigators.
Apple says it will release more details about how the program will work at a later date. If anything’s certain about it, it’s that Epic Games won’t be seeing that commission cut.