Apple Cuts App Store Fees in Half for Small Developers as Monopoly Concerns Loom

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Photo: Mladen Antonov (Getty Images)

Epic’s quixotic lawsuit against Apple over the fees it collects from the iOS App Store may be mired in the slow grind of the court system, but we’re already seeing the iPhone maker reevaluate its approach to taking a cut.

On Wednesday, Apple announced it will reduce its 30% cut from transactions in its app store by half for developers who earned less than a million dollars in the previous calendar year. Approved devs will only have to cough up a 15% commission for revenues routed through the App Store until they hit that million-dollar threshold or Apple decides to discontinue this program.


Despite the antitrust investigation in the EU that’s focused on probing the App Store, the aforementioned Epic lawsuits, and increasing criticism from U.S. lawmakers, Apple is framing its rate cut as an “App Store Small Business Program” intended to help out entrepreneurs who are struggling during the pandemic. “The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem,” the company wrote.

The framing gives Apple a bit of believable deniability that it’s simultaneously trying to help the little guy through a tough time while still keeping an eye on potential profits from businesses that haven’t needed to migrate online in the past. Apple can maintain that its 30% rate for huge companies that want to play in its walled garden remains a sound market-driven figure while taking some of the pressure off of smaller devs.


Over the summer, Basecamp’s David Heinemeier Hansson got into a public spat with Apple over the fees it wanted to collect from the Hey! email app on iOS. Following Apple’s announcement today, Hansson tweeted, “trying to split the App Store opposition with conditional charity concessions, they – a $2T conglomerate – get to paint any developer making more than $1m as greedy, always wanting more. As clever as [it’s] sick.”

For what it’s worth, Apple said that any developer that’s part of the program and exceeds the million-dollar revenue threshold will get to keep the reduced rate for the rest of the year. It’s not quite a progressive tax, but at least it doesn’t make devs stare at that $999,999 figure in horrified anticipation.


Hansson made his demands clear, tweeting that he’ll be satisfied when Apple allows devs to use a different payment processor in order to incentivize competition and when Apple lifts its vice grip on the language that devs can use to promote their apps. “THIS ISN’T SOME RADICAL SCHEME!! This is how software is sold in the Mac, how it’s sold on Windows, how it’s sold on the web,” he screamed.