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Apple to cut app store fees as legal scrutiny intensifies

UPDATED: Wed., Nov. 18, 2020

This photo from June 16, 2020, shows Apple's Fifth Avenue store in New York. Apple will cut its app store fee in half from 30% to 15% for most developers beginning Jan. 1.    (Associated Press)
This photo from June 16, 2020, shows Apple's Fifth Avenue store in New York. Apple will cut its app store fee in half from 30% to 15% for most developers beginning Jan. 1.   (Associated Press)
By Michael Liedtke Associated Press Associated Press

SAN RAMON, Calif. – Apple will cut its app store commissions in half for most developers beginning next year amid an intensifying debate about whether the iPhone maker has been using the fees to unfairly fatten its profits and stifle rivals competing against its own music, video, and other subscription services.

The concession announced Wednesday will lower Apple’s commissions for in-app subscriptions and other purchases from the 30% rate that has been in place since 2008 to 15%, effective Jan. 1. But the discount will only apply to developers with app store revenue up to $1 million annually – a threshold that excludes the makers of some of the most popular apps downloaded on iPhones, i- Pads and other Apple devices.

That group includes two of Apple’s fiercest critics: music streaming service Spotify, and Epic, the maker of the popular Fortnite video game.

Both those companies have helped spur increasing scrutiny of Apple’s app store practices among lawmakers and regulators in the U.S. and Europe. Apple sells music streaming and video services that have been helping to offset a slowdown in iPhone revenue in recent years.

The app store commissions feed Apple’s services division, which saw its revenue climb 16% to nearly $54 billion during the company’s most recent fiscal year.

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