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Mobile Monday: Apple Reduces App Store Commission to 15% for Small Businesses, Moves Forward with App Tracking Transparency

Posted Nov 22, 2020

In the mobile world, Apple always looms large and this week’s news was no exception. The tech giant’s recent statements has brought on much discussion from developers and the ad tech industry. Apple announced its plans to launch the App Store Small Business Program that will allow some developers to qualify for a reduced commission. Apple also reassured privacy campaigners that they will be moving forward with App Tracking Transparency. For more details on these stories, check out this week’s Mobile Monday!

App Store Small Business Program Reduces Commission

Apple recently announced a reduction to its App Store commission rates as a part of a new program for small businesses. The App Store Small Business Program will allow developers who earn less than $1 million in annual sales to qualify for a 15% cut, half of Apple’s standard 30% commission, on all paid app revenue and in-app purchases. Apple CEO Tim Cook described the move as a way to support small businesses, which he describes in a statement as “the backbone of the global economy and the beating heart of innovation.”

The App Store Small Business Program is expected to launch on January 1, 2021. App publishers will need to apply for the program, and Apple says it will be releasing more details about that process and other eligibility requirements and deadlines in December. For developers that exceed the $1 million in sales sometime in 2021, they will automatically be removed from the program and subject to the 30% cut. If they fall below the $1 million threshold in a subsequent year, they can re-qualify for the program and the reduced commission rate.

Apple Commits to App Tracking Transparency

Apple says it will move forward with App Tracking Transparency (ATT) which allows users to opt out of having their data collected as they move between apps. The privacy feature was supposed to be rolled out alongside iOS 14 in September but was delayed after many in the industry expressed concern about not being prepared for the change. Several organizations sent a letter to Apple expressing disappointment over the delay and urged the company to implement the new privacy requirements as soon as possible. Apple responded with a letter (posted on MacRumors) saying that they are committed to App Tracing Transparency which will be implemented in early 2021.

The letter also addresses criticisms made by opponents of ATT. Apple says advertising that respects privacy was “standard until the growth of the internet” and that the feature “applies to all developers equally, including Apple”. Apple then directly called out Facebook’s advertising practices in the letter saying their intent is “to collect as much data as possible across both first and third party products to develop and monetize detailed profiles of their users, and this disregard for user privacy continues to expand to include more of their products.” Despite resistance from Facebook and other ad tech companies, Apple insists that ATT will go into effect next year but the date has yet to be announced.

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