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Apple cuts app store fees for smaller developers

Apple cuts app store fees for smaller developers
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Apple is cutting the commission costs it charges smaller app developers for App Store sales, addressing some frequent complaints about the company's role as a facilitator of online commerce transactions.

On Wednesday, the tech company said that starting next year, it would collect 15 percent rather than 30 percent of App Store sales from third-party companies that generate no more than $1 million in revenue, including sales from in-app purchases, according to a press release.

The move marks a win for small businesses looking to gain a firmer footing in a digital landscape dominated by more massive tech companies, as some critics have argued the previously nonnegotiable 30 percent commission rate was unfairly levied against companies.

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Last year, the App Store ecosystem facilitated $519 billion in worldwide commerce, and more than 85 percent went to third parties, the release added.

"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," Tim Cook, Apple's chief executive, said Wednesday.

Apple plans to publish comprehensive details regarding its new "App Store Small Business Program" starting next month with implemented changes going into effect Jan 1.

The iPhone creators underscored any developers new to the App Store would qualify for the reduced commission costs until its revenue exceeds $1 million, excluding the developer's due commission payments.

"If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year," meaning rates will jump from 15 percent to 30 percent, according to Apple.