Apple has officially launched its new App Store Small Business Program initiative.
Set to start in less than a month, on January 1, 2021, app developers making less than $1 million annually will have the App Store commission rate halved. Instead of 30%, Apple will only be taking 15% of their paid app and in-app purchase proceeds.
As we’ve mentioned previously, larger corporations like Spotify and Epic Games aren’t too pleased being left out.
Having had to pay the full 30% fee, they’ve never had the opportunity to take advantage of a system such as the App Store Small Business Program.
In August, Apple ended Epic Games’ developer contracts after Epic implemented a workaround payment method from within the game.
This allowed them to take the complete amount of Fortnite’s in-app payment proceeds, and Apple saw that as a breach of their App Store rules.
After all, Epic wasn’t coughing up any of that 30% commission to Apple at that point.
In light of these events, Spotify, Epic Games, and Match Group banded together to form the ‘Coalition for App Fairness’ in September.
Their efforts to shed light on Apple’s App Store practices' perceived malpractice haven’t gone unnoticed, especially amidst the many allegations of Apple engaging in anti-competitive behavior and overstepping antitrust laws.
With the App Store Small Business Program introduction, Apple aims to encourage roughly 98% of App Store developers making under $1 million to keep pushing content on their App Store.
On their new developer page dedicated to the App Store Small Business Program, Apple outlines the following eligibility requirements:
- “Existing developers who made up to 1 million USD in proceeds in 2020 for all their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.”
- “If a participating developer surpasses the 1 million USD threshold, the standard commission rate will apply for the remainder of the year.”
- “If a developer’s proceeds fall below the 1 million USD threshold in a future calendar year, they can re-qualify for the 15% commission the year after.”
- “Developers must identify any Associated Developer Accounts to determine proceeds eligibility.”
The enrolling process, which was previously unknown, involves being an Apple Developer Program Account Holder, reviewing and accepting the latest Paid Apps agreement posted this month in App Store Connect, and listing Associated Developer Accounts.
An Associated Developer Account is an Apple Developer Program account that you own or control or an Apple Developer Program account that owns or controls your account.
For more details, check out Apple’s all-new App Store Small Business Program website.
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