• Sun. Aug 7th, 2022

Apple shocks iOS developers with 27% commission on third-party payments

ByChad J. Johnson

Feb 4, 2022

Getty Images | NurPhoto

Apple surprised iOS app developers by announcing a plan to charge 27% commission on third-party payments, almost as much as Apple’s standard 30% in-app payment cut. While Apple applies the 27% commission only to dating apps in the Netherlands to comply with a government order, critics fear that Apple will charge commissions in all countries where it is necessary to authorize third-party payments, unless such fees are specifically prohibited.

In a new developer support document, Apple said the 27% commission will apply even when a developer is simply linking to their own website. “To comply with an order from the Dutch Authority for Consumers and Markets (ACM), Apple is allowing developers distributing dating apps on the Dutch App Store to choose one of the following actions: 1) continue using Apple’s in-app purchase system, 2) use a third-party in-app payment system, or 3) include a link in the app directing users to the developer’s website to make a purchase,” the statement reads. document introduction.

Explaining that the 27% commission applies to options 2 and 3, the document states:

Per the ACM order, dating apps that have the right to connect or use a third-party integrated payment provider will pay Apple a commission on transactions. Apple will charge a 27% commission on the price paid by the user, net of value added taxes. This is a discounted rate that excludes value related to payment processing and related activities.

Apple claims ‘audit rights’ over sales

To ensure compliance, developers must provide a sales report to Apple each month. Apple would then send an invoice to the developer.

Apple notes that it “has audit rights pursuant to the terms and conditions of the law,” which “will allow Apple to review the accuracy of a developer’s digital transaction record as a result of the law, subject to the law. ensuring that the appropriate commission has been paid to Apple. “Failure to pay commission” could result in offsetting of proceeds owed to you in other markets, removal of your app from the App Store, or removal of of the Apple Developer Program”.

The ACM issued its order on December 24. “Dating app providers are currently unable to freely choose a payment system for purchases made in their dating apps by consumers,” the agency said. “If Apple does not adjust the unreasonable terms within two months, it will have to pay a periodic penalty payment of €5 million per week up to a maximum of €50 million.”

Arment expects Apple to use the same tactic elsewhere

“Even if you’re not a dating app in the Netherlands, this is worth reading,” said Marco Arment, who founded Instapaper and Overcast and was formerly CTO of Tumblr. wrote on Twitter today while pointing to Apple’s announcement. “This is almost certainly how Apple plans to comply with ALL regulations on external purchases, until they are forced to be more permissive.”

We asked Apple today if it will eventually charge similar fees on third-party payments in the US and around the world and will update this article if we get a response.

South Korea passed a law requiring Apple and Google to change App Store payment requirements last year. Last month, “Apple announced plans to provide an alternative payment system at a reduced service fee from the current 30% fee, as the tech giant submitted its compliance plans to the Korea communications,” the Korea Herald reported at the time. . Google previously “committed to providing an alternative payment system on its app store in South Korea for a slightly reduced service fee,” the article said.