Apple reshapes EU App Store terms, replaces Core Technology Fee with 5 per cent commission

NEW DELHI: Apple has announced changes to its business terms for apps in the European Union following discussions with the European Commission, introducing a single set of terms for developers distributing apps in the region.

The new terms will take effect from October 1, with developers able to sign them from Wednesday. The changes resolve Apple’s disagreements with the European Commission over business terms and alternative app distribution while simplifying the framework for developers.

Under the revised model, Apple will replace its Core Technology Fee with a 5 per cent Core Technology Commission on digital transactions in apps distributed outside the App Store. The new terms will also eliminate the initial acquisition fee and store services fee.

Apple will adjust commission rates across the App Store, alternative payment processing and apps distributed through alternative channels.

For App Store apps using Apple’s In-App Purchase system, the commission will be 26 per cent. Developers covered by programmes such as the App Store Small Business Programme, Mini Apps Partner Programme and Video Partner Programme will pay 15 per cent, while auto-renewing subscriptions after the first year will also attract a 15 per cent rate.

For App Store apps using alternative payment processing, the commission will be 20 per cent, falling to 10 per cent for eligible developers under the specified programmes.

Apps that link out from the App Store to complete purchases will attract a 15 per cent commission, or 10 per cent for eligible developers.

For apps distributed through alternative app marketplaces or directly through the web, Apple will charge a 5 per cent Core Technology Commission.

The revised terms will also allow developers in the EU to offer Apple In-App Purchase alongside alternative payment options. Developers will need to select their payment options and maintain those choices for 12 months, with presentation requirements intended to provide users with greater clarity.

Apple is also introducing additional child safety measures for alternative payments. Apps in the Kids category will not be allowed to include links to websites for completing transactions.

For users under 18, apps using alternative payment processing or web-based transactions will be required to include a parental gate. Apps will also be barred from linking to transaction websites for users under 13, with the protections adjusted in EU member states where parental consent requirements apply to older children.

Apple is further expanding eligibility for companies seeking to operate alternative app marketplaces or distribute apps through the web in the EU.

Eligible entities can qualify by meeting financial stability requirements, being publicly traded or owned by a listed company, receiving venture funding from an established investment firm, completing a financial audit by a licensed accountant, or being a government entity, educational institution or nonprofit.

Apple said apps distributed outside the App Store through the web will continue to undergo its Notarization process, which provides a baseline review focused on basic functionality and protection against serious security threats.

The company is also making resources available to developers to help them understand and adopt the revised business terms and distribution options in the EU.