Apple announced on Thursday that it will reduce the commission fees it collects from the App Store in mainland China, following discussions with Chinese regulatory authorities in the company’s second-largest market.
Starting Sunday, the standard commission rate for in-app purchases and paid app transactions will drop to 25% from the current 30%, according to a statement on Apple’s developer website. For qualifying in-app purchase transactions under the App Store Small Business Program and Mini Apps Partner Program (as well as auto-renewals of subscriptions after the first year), the rate will be lowered to 12% from 15%.
The adjustment benefits Chinese app developers significantly, particularly those operating within “super apps” such as Tencent’s WeChat and ByteDance’s platforms, which host numerous third-party mini apps. The change is expected to save developers billions of yuan annually and improve options for digital consumers in the market.
Reuters:
“In China’s case, (Apple) have been talking with the IT ministry and other departments, and have been requested or pressured to reduce their fees,” said Rich Bishop, founder of AppInChina, a firm that advises foreign software developers on making their apps available in China.
The move comes into effect on World Consumer Rights Day on Sunday, a time when Chinese state media usually highlights domestic and foreign companies accused of consumer rights violations. Apple was targeted by the campaign in 2013, when its after-sales service was criticized by state broadcaster CCTV, forcing the company to publicly apologize.
In future, the Chinese government may request Apple to collect App Store revenues in China instead of overseas, and further tighten regulatory oversight for foreign apps published in China, Bishop said.
Apple’s fee reduction also applies to international developers whose apps are available on the China App Store.
MacDailyNews Take: The cut is estimated to save Chinese developers more than 6 billion yuan ($873 million) in operating costs annually, the CCP state-run “Economic Daily” said in a Thursday report. So, $873 million is Apple’s fee for iPhone sales not being targeted by the Chinese Communist Party this year.
“Nice business you have here. We’d hate to see something happen to it,” the CCP to Apple, in essence.
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