Apple cuts app store fees as legal scrutiny tightens

San Ramon, CA (AP)-Apple will start most of the next year as the debate over whether iPhone makers are using fees to unfairly bloat their profits and curb their competitors Music, video, and other subscription services that cut developer app store fees in half.

The concession announced on Wednesday will reduce Apple’s fees for in-app subscriptions and other purchases from 30%, which had been in effect since 2008, to 15% from January 1st. However, the discount only applies to developers who are increasing their app store revenue. Up to $ 1 Million Annual-Threshold excluding manufacturers of the most popular apps downloaded to iPhones, iPads and other Apple devices.

The group includes two of Apple’s most intense critics, Spotify, a music streaming service, and Epic, the maker of the popular Fortnite video game.

Both of these companies are spurring increased scrutiny of Apple’s app store practices among US and European lawmakers and regulators. Apple sells music streaming and video services that help offset the recent slowdown in iPhone revenue.

App store fees were supplied to Apple’s services division, and Apple’s revenue for the fiscal year ending September last year increased 16% to nearly $ 54 billion. Only selling the iPhone brings more revenue to Apple than the service.

Apple is looking to cut prices as a way to help most companies that make about 1.8 million apps in their stores in the harsh economic conditions brought about by the pandemic. According to mobile analytics firm Sensor Tower, about 98% of app developers make less than $ 1 million annually.

But reducing fees probably won’t hurt Apple’s bottom line. This is because, based on SensorTower’s estimates, the small developers targeted for the cut contribute only about 5% of Apple’s app store revenue.

This is probably one of the reasons investors seemed unwilling to cut Apple’s future rates. During the afternoon trading, the company’s share price rose slightly.

Spotify ridiculed Apple’s low committee as a “window dressing” designed to discourage regulators from cracking down on that practice. “This latest move further demonstrates that their app store policy is arbitrary and capricious,” Spotify said in a statement.

Epic continues to pursue a proceeding filed against Apple earlier this year to acquire the right to sell the product within the app without paying Apple’s fees.

Meanwhile, a Washington-based non-profit organization called the Coalition for App Fairness wants “fair treatment” in the way tech giants run app stores. Its members include Epic, Spotify, online dating app maker Match Group, and other members such as Tile, Basecamp, ProtonMail, and European media industry groups.

European regulators are also investigating Apple’s mobile app stores and payment platforms, and are concerned that their practices are distorting competition. This is part of the EU’s battle for control of major tech companies.

Apple CEO Tim Cook has cut prices as a mutually beneficial move for everyone involved.

“We are launching this program to help small business owners write the next chapter in creativity and prosperity on the App Store,” Cook said in a statement.

Details of the reduced fees will be announced next month.

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Apple cuts app store fees as legal scrutiny tightens

Source link Apple cuts app store fees as legal scrutiny tightens

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