Lower app commissions for small developers: watch out for app transfers

Lower app commissions for small developers: watch out for app transfers

Small and crude developers have long complained about Apple’s App Store commission of 30 percent, which is dropped on every paid app, as well as every in-app purchase and – at least in the first year – every in-app subscription. Therefore, in January, the corporation introduced the so-called App Store Small Business Program, which allows certain developers to achieve a reduction in payment to 15 percent. However, they must not be too rough – annual sales must not exceed US$1.2 million (without deducting Apple’s regular commission). There are also several rules to follow, which Apple says are designed to prevent abuse. But exactly these seem to be real pitfalls for some devs now.

Apple wants to prevent abuse

Developer Sean Harding, who has worked for Google, its YouTube subsidiary and Amazon, reports that he was kicked out of the program in 2020 despite making only $1,000 in revenue. According to his story shared on Twitter this week, this has to do with a provision Apple seems to be using to try to prevent benefits cheating – but that doesn’t fit Harding’s case at all. So it’s officially forbidden to transfer apps to other companies while you’re part of the Small Business Program. Apple wants to prevent developers from simply founding many small companies in order to achieve the commission reduction on all their apps.

Harding formed a private company (LLC) before joining the program, and set up a new developer account to transfer his existing apps to – because he wanted to take his app business more seriously in the future. To make sure he wouldn’t get in trouble for this, he wrote to Apple and asked if it was okay to do so. He did not get an answer from the Small Business Program support at first. After further inquiry, it chopped that the app transfer was okay because Harding was not yet part of the program. In the mail, however, it was also mentioned that there is no "Warranty" give. However, Harding did not ask again.

No transfer since 31. December allowed

As he then found out after the transfer, this guarantee did not actually exist: he was not approved for the Small Business Program due to the transfer of the apps from one account to another, and must continue to pay the usual 30 percent. Two attempts to change the decision also failed. Apple emphasized that apps that were transferred after 1. January 2021 are automatically ineligible for the Small Business Program. Harding now argues that Apple did not explain this to him.

In fact, Apple also lists this fact in its Small Business Program information. There it states that apps could not be transferred after. December. Why the support did not inform about this remains a mystery.

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