Apple to Charge 5% Commission on EU App Sales Outside App Store Under Revised...

Apple is overhauling the commercial rules governing its App Store in the European Union, replacing its contentious fee structure with a simpler system that will charge a 5% commission on digital transactions made through apps distributed outside the App Store.

The changes, announced Tuesday and due to take effect on October 1, mark Apple's latest effort to settle a prolonged regulatory dispute with the European Commission over how developers distribute apps and collect payments on the iPhone and iPad. Apple said it developed the new terms in close collaboration with the Commission and that the changes resolve its disagreements with the EU over alternative distribution and payment systems.

Under the new framework, developers distributing apps through alternative marketplaces or directly from their websites will pay Apple a 5% "Core Technology Commission" on digital goods and services. The charge applies to purchases including one-time transactions and subscriptions. Apple is eliminating the previous Core Technology Fee, as well as its initial acquisition and store services fees.

For apps that remain in Apple's App Store but use alternative payment processors, the commission will be 20%, falling to 10% for developers eligible for Apple's small-business programme. Apple will also establish a single set of business terms for developers operating in the EU, replacing the more complicated system created after the bloc's Digital Markets Act came into force.

The significance of the change goes beyond a reduction in fees. The DMA's move was designed to weaken Apple's position as the dominant gateway between developers and iPhone users by allowing alternative app stores, direct web distribution and external payment systems. The European Commission says the rules are intended to reduce developers' dependence on Apple's App Store and give consumers access to alternative offers.

Apple's previous response to the DMA became a major point of contention because the Core Technology Fee could make alternative distribution economically unattractive for large developers. By replacing an installation-based charge with a commission tied to digital transactions, Apple is shifting the economics of alternative distribution toward a model where its financial return is more closely linked to developers' actual sales.

That could make alternative app stores and web distribution more commercially viable, particularly for large subscription-based businesses. At the same time, Apple's continued ability to collect commissions means it is not surrendering monetization of the iOS ecosystem altogether.

The company is also retaining a substantial financial stake in transactions that remain within the App Store. That distinction is necessary because the new 5% rate applies to apps distributed outside Apple's store, while developers using Apple's App Store with alternative payment processing will face a substantially higher 20% rate.

The European Commission welcomed Apple's revisions but said it would monitor their implementation. That leaves open an important question: will regulators ultimately consider the new structure sufficient to deliver the level of competition envisioned by the DMA?

Other Pressure Points for Apple

Apple's concessions also come at a time when its highly profitable services business is facing growing regulatory pressure. The App Store has historically been an important component of Apple's services ecosystem, with the company benefiting from commissions on digital purchases made through its platform. Opening distribution and payment channels could put pressure on that revenue stream as developers gain more opportunities to move transactions outside Apple's billing system.

The change is therefore a regulatory concession with potentially broader financial implications. The more developers use alternative marketplaces and web distribution, the greater the portion of digital spending that could escape Apple's traditional App Store economics. At the same time, the 5% commission gives Apple a continuing revenue stream from transactions occurring outside its store.

Epic Games, which has fought Apple for years over its App Store policies, rejected the changes. The "Fortnite" maker called the 5% commission "junk fees" and argued that Apple's revised structure still fails to deliver the competition required by the DMA.

"If the Commission accepts the terms and drops their ongoing enforcement actions, the law will become meaningless and consumers and developers will not experience the benefits it was designed to provide," Epic said in a post on X.

The criticism highlights the remaining tension between Apple and developers. Apple's position is that it is providing developers with greater choice while continuing to charge for the technology and ecosystem that support iOS. Developers and regulators, meanwhile, have argued that Apple's control over distribution gives it an advantage that cannot easily be neutralized by simply creating alternative channels.

The EU dispute is also part of a broader global challenge to Apple's App Store model. Japan and Brazil have pursued measures to increase competition around Apple's app ecosystem, while Apple continues to fight over App Store rules in the United States.