27%: Apple reveals commission rate for alternative App Store payments in Netherlands

App Store on iPhone
App Store on iPhone (Image credit: iMore)

What you need to know

  • Apple is being forced to allow alternative payments for dating apps in the Netherlands.
  • The company has revealed that it will collect 27%, instead of 30% commission.
  • Apple says it is entitled to collect commission on all payments made under the new law's provisions, and that the three percent decrease excludes the value for collection and remittance of taxes carried out by Apple.

Apple has revealed that it will collect 27% commission instead of 30% on payments made using alternative payment methods for dating apps in the Netherlands.

In an update to its support article on the matter, Apple now states:

Consistent with the ACM's order, dating apps that are granted an entitlement to link out or use a third-party in-app payment provider will pay Apple a commission on transactions. Apple will charge a 27% commission on the price paid by the user, net of value-added taxes. This is a reduced rate that excludes value related to payment processing and related activities. Developers will be responsible for the collection and remittance of any applicable taxes, such as the Netherlands' value-added tax (VAT), for sales processed by a third-party payment provider.

This is the first insight into how Apple plans to handle commission on alternative app payments in the Netherlands, as expected, developers who want to use the alternative method will have to provide Apple with a monthly record of each sale of digital goods and content through the App Store within 15 calendar days of the end of Apple's fiscal month, they will then be invoice and be required to pay Apple the 27% as set out in the document.

Why is this happening? - Analysis

All of this is to comply with new regulations in the Netherlands passed down by its market watchdog, the Netherlands Authority for Consumers and Markets (ACM). the ACM has ruled that Apple, allowing developers of dating apps to distribute their apps on the App Store, must provide the means for an alternative method of payment outside of Apple's in-app purchase system.

This is the key argument at the heart of the Apple vs Epic Games trial you might have heard about, and emerging antitrust regulation around the world. Many companies, like Tim Sweeney's Epic Games, want to use Apple's platforms but don't think they should be forced to use Apple's in-app purchase system, the company's all in-one-solution to buying digital goods and services on the App Store.

The Netherlands, alongside South Korea, is one of the first countries to legislate against Apple on the matter. However, a key battleground has been the rate of commission. Companies and developers that want these changes say they should not have to pay Apple the 30% rate of commission just to sell digital goods and services on the App Store, hence the need for alternative payments. However, Apple has always maintained that it would collect commission on these payments, we just didn't know how, until today.

The system is very complex, for instance, apps distributed in the Netherlands that take advantage of this cannot be available anywhere else, so they have to be submitted using a separate app binary and can only be distributed in the Netherlands.

Stephen Warwick
News Editor

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.

Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9