Apple EU App Store fees drop to 5% for alternative distribution

The revised fee structure provides a clearer path for streaming services to bypass the traditional 30% 'Apple tax' while maintaining presence on iOS devices. By lowering commissions to 10% or 15% for video partners, Apple is attempting to neutralize regulatory pressure from the Digital Markets Act while retaining a baseline revenue stream through the new Core Technology fee. This shift forces competitors like Spotify and Epic Games to decide between accepting these improved terms or pursuing further costly litigation against the platform's gatekeeper status. Watch for the European Commission's formal response after the October 1 implementation to see if these concessions satisfy DMA compliance requirements.

Apple's revised EU fee structure arrives amid intensifying pressure from developers who have long challenged its App Store economics. Epic Games, which launched its own iOS app store in the EU in August 2024, has been the most visible challenger to Apple's distribution monopoly. Epic Games officially launched its rival iOS app store in the European Union, marking the first time Apple's App Store faced a serious competitor on the platform, initially offering Fortnite, Rocket League Sideswipe, and Fall Guys. The Coalition for App Fairness, which counts Spotify and Epic Games among its founding members, has maintained that Apple's compliance measures under the Digital Markets Act remain insufficient, arguing that the new fee layers still impose costs that would not exist in a genuinely open market.

The European Commission's response to Apple's latest changes signals cautious approval but leaves enforcement questions open. The Commission welcomed Apple's changes and confirmed it would monitor effective implementation of the new terms, noting that EU users have a right to full and effective choice of alternative app distribution channels. Epic Games, however, denounced the updated structure as "new junk fees," arguing that Apple's 20% fee on alternative in-app payment options and 15% fee on links to external purchases deliberately violate the DMA's requirement that developers be allowed to offer link-outs "free of charge." Epic does not qualify for the reduced rates available to Small Business Program, Video Partner Program, and Mini Apps Partner Program participants, meaning it faces the full 5% Core Technology Commission on digital purchases made through its store on iOS in the EU.

For streaming services, the practical implications center on whether the reduced commissions create a viable path to bypass in-app purchase entirely. Apple's updated terms now permit developers to offer Apple In-App Purchase alongside alternative payment options, a combination that had not previously been allowed in the EU, with developers required to select their payment configuration and maintain it for 12 months. Netflix has already directed EU users to its website for subscription sign-ups since 2023, and the new fee structure may encourage additional streaming platforms to follow that model while maintaining iOS presence through alternative marketplaces. The mandatory notarization requirement for all alternatively distributed apps adds a friction layer that Apple frames as user safety but that critics, including Epic, characterize as an intentionally poor-quality install experience designed to discourage sideloading.