Apple has agreed to substantial revisions to its European App Store business terms in a significant concession to EU regulators, aiming to resolve a prolonged competition law dispute. The changes encompass lower commission rates and the removal of a contentious fee mechanism, signaling a major policy shift for the tech giant.
On Tuesday, Apple announced it will eliminate the Core Technology Fee for EU developers who bypass the App Store, replacing it with a 5% commission on digital transactions generated through apps distributed outside its platform. This new structure takes effect on October 1st.
Apple stated the adjustments "resolve the company's differences with the European Commission regarding business terms and alternative distribution channels." A spokesperson for the European Commission welcomed the revised terms, calling them the result of "close dialogue," while also pledging continued oversight of Apple's implementation of the new rules.
The settlement represents a notable retreat for Apple, coming after the EU fined it €500 million (approximately $579 million) earlier this year for violations related to the Digital Markets Act.
Scrapping the Core Technology Fee: Reshaping Rules for External Distribution
A central element of this reform is Apple's complete abandonment of the Core Technology Fee, which had drawn widespread criticism from developers. The fee, charged per app installation for EU developers choosing to distribute outside the App Store, was viewed by detractors as an artificial hurdle designed to discourage external distribution.
Under the new system, Apple will instead levy a 5% commission on digital transactions occurring within apps installed via alternative channels. Apple has also committed to expanding the eligibility criteria for European businesses to distribute and monetize iPhone apps outside the App Store, and will permit developers to offer alternative payment options alongside Apple's own system.
In-App Purchase Commissions Reduced, Subscription Incentives Added
Apple has also conceded ground on in-app transactions. Under the updated policy, the standard commission for in-app purchases in Europe will drop from 30% to 26%. Developers participating in Apple's various partner programs, as well as those offering auto-renewable subscriptions, will qualify for a reduced rate of 15%.
These fee adjustments apply to all developers distributing apps in the EU, a move Apple says helps "reduce complexity" by unifying all parties under a single set of commercial terms.
Ongoing DMA Enforcement and the EU Regulatory Battle
This settlement marks the latest major development in the ongoing series of conflicts between Apple and the European Commission over the Digital Markets Act, which came into full force over two years ago and requires tech giants like Apple to open their platform ecosystems to third parties.
In 2025, the European Commission fined Apple €500 million for failing to allow developers to include external purchase links within the App Store. An attempt by Apple to overturn the penalty in court failed in July of this year.
The current Commission investigation stems from a separate procedure, initiated in 2024, to assess whether Apple's modifications for DMA compliance are genuinely adequate.
For years, app developers have accused Apple and Google of monopolizing smartphone app distribution through high fees and closed payment systems. Apple has a clear financial incentive to defend its existing ecosystem, as the App Store is significantly more profitable compared to external distribution channels.
Third-Party App Store Landscape Takes Initial Shape
EU regulatory pressure has already prompted a degree of openness within Apple's ecosystem. Under the DMA, Apple is now required to allow third-party app stores on devices in the EU, and several independent platforms have already launched, including one supported by Epic Games, the developer behind the popular game Fortnite.
Apple has also announced new child safety measures, requiring parental authorization before users under 18 can use alternative payment channels or web transaction links. The European Commission has indicated it will closely monitor the implementation of these new terms, meaning regulatory scrutiny is far from over.
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