By CATHERINE THORBECKE, ABC News
(CUPERTINO, Calif.) — Apple announced Wednesday it was slashing the App Store commission it collects in half for smaller app developers that earn up to $1 million per year on its store.
The move comes as the tech giant’s App Store has come under fire in recent months from lawmakers over allegations that it has grown too powerful and has the ability to squash competition.
Dubbed the “App Store Small Business Program,” Apple said Wednesday that this change will benefit the vast majority of developers who sell digital services on the store.
The program launches next year, and means that Apple will take only a 15% commission from developers that earned up to $1 million in proceeds during the previous calendar year. For those who made more than $1 million in proceeds (or a developers’ post-commission earnings), they will still have to pay the App Store’s standard commission rate of 30%, according to the company.
“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love,” Apple’s chief executive Tim Cook said in a statement.
“The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea,” Cook added. “Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”
In a lengthy report scrutinizing big tech released in October, the House Judiciary Committee’s Antitrust Subcommittee claimed Apple “exerts monopoly power in the mobile app store market” — an allegation Apple has disputed.
Epic Games, the developers of the wildly popular game Fortnite, have notably been at the fore of the battle against Apple’s allegedly competitive practices. On Wednesday, the company announced it was taking new legal action in Australia over what it calls “anti-competitive” practices by Apple.
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