Apple announced today that it’s halving its App Store cut for developers who earn under $US1 ($1.4) million, from 30% to 15%. The company has been under fire for its App Store policies recently, notably from Fortnite developer Epic.
The App Store Small Business Program will launch on January 1. App developers who make under $US1 ($1.4) million in the previous calendar year can qualify for the reduced commission. If developers make over $US1 ($1.4) million, the standard 30% cut will apply for the rest of the year, and developers whose earnings drop into the applicable range can apply for the reduced rate for the next year.
As The Verge points out, this isn’t the first time Apple has given some developers a deal on the App Store. Apple only took 15% of subscriptions that stayed with the service for over a year, and Amazon Prime Video received a reduced fee for being on the App Store. But this cut will benefit a wider range of smaller developers, a notable move at a time when the company’s App Store policies are being criticised by app developers and governments.
In its press release, Apple notes that the Small Business Program “comes at an important time as small and independent developers continue working to innovate and thrive during a period of unprecedented global economic challenge.” But one elephant in the room is Fortnite developer Epic’s war with Apple over its App Store cut, which saw Epic getting kicked off the App Store for releasing its own payment method and ultimately taking Apple to court. Apple has been in the crosshairs over anti-trust practices lately, with a House Judiciary subcommittee on anti-trust practices finding that Apple — alongside Google, Facebook, and Amazon — “abuse their power by charging exorbitant fees” in a report in October.
Apple will still reap the financial benefits from App Store developers, like Epic, who make over $US1 ($1.4) million — The Verge notes that while an estimated 98% of developers could be eligible for the program, they account for only 5% of the App Store’s revenue. While certainly not an altruistic move on Apple’s part, the cut is sure to come as welcome to App Store developers. How much it can repair Apple’s damaged reputation is another question.