Apple revises Europe App Store fees to settle payments dispute

• Apps purchased through Apple's App Store using Apple's payment system will pay 26% commission, while those using their own payment processing pay 20%, link-out purchases pay 15%, and third-party app store distributions pay 5%
• The changes replace Apple's previous more complicated system introduced in 2024 and respond to the EU's Digital Markets Act requiring 'gatekeepers' like Apple to open up their platforms to third parties
• Apple's App Store generates significant revenue within its Services division, though the company notably did not highlight it as a top growth driver in its most recent quarterly earnings for the first time since 2023

Summary: Apple Revises Europe App Store Fees to Settle Payments Dispute

Key Developments:

Apple announced a major overhaul of its European Union app store commission structure, effective October 1, aimed at resolving regulatory disputes under the EU's Digital Markets Act (DMA). The new tiered fee system significantly reduces commissions compared to Apple's historical 30%/15% standard.

New Fee Structure:

• Third-party app stores: 5% commission on in-app purchases ("Core Technology Commission")
• Apple App Store using Apple's payment system: 26% on digital goods/services
• Apps using own payment processing: 20%
• Apps linking to external websites for purchases: 15%
• Some fees can be halved through Apple program participation

Regulatory Context:

The DMA, passed in 2022, requires tech "gatekeepers" like Apple to open their ecosystems to third parties. Europe is currently the only region permitting iPhone software installation from the web, though Japan and Brazil have also mandated third-party app stores. In the U.S., Apple continues fighting restrictions on web payment linking through ongoing Epic Games litigation, proposing a 15% commission on link-out payments.

Market Implications:

The App Store generates substantial revenue within Apple's profitable Services division. However, CFO Kevan Parekh noted the App Store was not highlighted as a top Services growth driver in the most recent quarter—the first time since 2023, according to Morgan Stanley. Parekh attributed slower performance to declining mobile gaming and business model changes in certain countries.

The revised structure represents a significant concession to EU regulators while maintaining meaningful revenue streams from alternative distribution channels.