Apple is replacing its controversial per-install fee for apps distributed outside the App Store with a 5% commission on digital transactions, giving European developers a simpler—but still contested—set of economics for deciding how they distribute and monetize iPhone apps.
Apple said the new EU terms were developed following close collaboration with the European Commission and will move every developer distributing apps in the bloc onto a single set of business terms from October 1.
Reuters reported that the 5% Core Technology Commission replaces the more complicated Core Technology Fee that EU regulators had criticized for discouraging developers from using alternative distribution channels on iOS.
For founders and product teams, the change turns distribution architecture into a more explicit margin calculation.
Apple Creates a Four-Tier Pricing Model
CNBC reported that apps using Apple’s App Store and In-App Purchase system will pay a 26% commission, while apps processing payments themselves will pay 20%, apps linking users to the web will pay 15%, and apps distributed through alternative stores or directly through the web will face the 5% Core Technology Commission.
Apple said reduced rates will apply to many developers: qualifying App Store programs and subscriptions after their first year can bring the 26% rate down to 15%, while qualifying developers using alternative payment processing can pay 10%.
That creates as much as a 21-percentage-point difference between Apple’s standard In-App Purchase rate and distributing outside the App Store.
For a subscription startup or high-margin digital service operating at scale, that gap gives engineering teams a more concrete basis for asking whether supporting alternative distribution and payment infrastructure is worth the added complexity.
Apple Removes Two Fees but Keeps a Cut Outside Its Store
The new framework eliminates Apple’s previous initial acquisition fee and store services fee, while retaining the 5% commission for transactions inside alternatively distributed apps.
Apple said developers will also be able to offer Apple In-App Purchase alongside alternative payment options, something previously prohibited under its EU terms, although developers must select their payment setup and maintain those options for 12 months.
That matters for product teams because alternative payments no longer necessarily require abandoning Apple’s payment system entirely. Developers can potentially design several purchasing routes while evaluating conversion, fees and user behavior across them.
Alternative App Stores Get a Lower Barrier to Entry
Apple is also expanding which organizations can operate alternative marketplaces or distribute applications directly over the web.
Apple said companies can now qualify through criteria including a moderate Dun & Bradstreet financial-stability score, being publicly traded, receiving venture funding from an established investment firm, completing a licensed financial audit, or operating as a government body, educational institution or nonprofit.
For venture-backed European startups, that is an important change. Alternative iOS distribution is becoming less dependent on meeting a narrow scale threshold and more accessible to companies that can demonstrate credible financial backing.
Apple will not relinquish technical oversight entirely. The company said every alternatively distributed app will continue to undergo Notarization, its baseline review for functionality and protection against serious security threats.
Epic Says the New Economics Still Protect Apple
The new structure has not ended the debate over whether alternative iOS distribution is genuinely competitive.
Epic Games, whose legal battles with Apple have challenged App Store fees, called the new commissions “junk fees” and argued they do “nothing to open up the mobile app ecosystem to competition” as required by the Digital Markets Act.
The bigger signal for app builders is that Europe is turning iOS distribution from a largely fixed platform tax into a product and infrastructure choice with different cost structures.
Apple still takes a percentage even when developers leave its store. But the widening gap between 26%, 20%, 15% and 5% gives founders something they previously had much less of on iOS: meaningful economic reasons to rethink where an app is distributed, who processes its payments, and how much of the stack Apple actually needs to control.
