On 18 August 2026 Apple stopped charging European developers per install and started charging them per transaction. Those are not two versions of the same tax.
The headline everyone ran was the commission cut — App Store In-App Purchase falling from 30% to 26%. That is the smaller half of the story. The larger half is structural: the Core Technology Fee, a flat €0.50 charged on every first annual install past one million, is being replaced on 1 October 2026 by a Core Technology Commission of 5% on digital transactions. A fee levied on downloads has become a fee levied on money.
If you buy iOS users, that distinction lands directly inside your bid. A per-install fee is a fixed marginal cost attached to every acquired user, including the overwhelming majority who never pay you anything. A commission is a variable cost attached only to the users who do. Move a charge from the first column to the second and the arithmetic that sets your ceiling bid changes shape — not just magnitude.
01What Apple actually announced on 18 August
Apple published a single unified set of business terms for the European Union, replacing the layered structure it introduced in June 2025. In Apple’s own framing, the package is designed to “reduce complexity by moving every developer that distributes apps in the EU to a single set of business terms.” Everything below takes effect on 1 October 2026.
| Distribution & payment path | Standard rate | Reduced rate |
|---|
| Apple In-App Purchase | 26% | 15% |
| Alternative payment processing, in app | 20% | 10% |
| Link-out to a web purchase | 15% | 10% |
| Alternative marketplace or web distribution | 5% Core Technology Commission | 5% |
The reduced rates apply to Small Business Program participants, Mini Apps Partner Program members, Video Partner Program participants, and auto-renewing subscriptions after their first year. Two line items disappear entirely: the initial acquisition fee and the store services fee. Under the June 2025 structure those were, respectively, 2% on the first six months of a newly acquired customer’s purchases, and a tiered 13% or 5% depending on whether a developer accepted or declined the second tier of App Store services.
Three other provisions matter operationally. Developers may now offer Apple In-App Purchase alongside alternative payment options, which was previously prohibited in the EU. Whichever configuration you pick must be held for twelve months across every EU storefront. The framework requires iOS 26.2, iPadOS 26.2, macOS 26.6, tvOS 26.6, visionOS 26.6 or watchOS 26.6 as a minimum.
Apple also widened who may operate an alternative marketplace — a Dun & Bradstreet stability rating, public-company status, established venture funding, an accountant’s audit, or government, educational and non-profit status now all qualify, where the previous bar demanded heavy financial backing or a million-plus EU installs. Notarization review still applies to every app regardless of route.
→ TIMELINE NOTE
The sunset slipped, and the slip is instructive
When the June 2025 terms landed, the widely reported plan was that the Core Technology Fee would give way to the Core Technology Commission by January 2026. It did not. The transition arrives on 1 October 2026, roughly nine months later than trailed. If you are building a 2027 revenue model on any Apple date that has not yet passed, discount it accordingly — the same caution applies to the Campaign Management API sunset on 26 January 2027, though that one has a hard shutdown attached rather than a fee schedule.
The direction of travel: the European Commission fined Apple €500 million in April 2025 for Digital Markets Act non-compliance, and the June 2025 response was widely criticised as excessively complex. This is the third substantial revision, and Apple describes it as resolving its disagreements with the Commission over business terms and alternative distribution.
02The old instrument: a fee that scaled with installs
The Core Technology Fee was €0.50 per first annual install, charged above a threshold of one million first annual installs in a rolling twelve-month period, to developers who had signed the Alternative Terms Addendum for Apps in the EU and were distributing on iOS 17.4 or later. Updates counted once per user per year rather than per update.
Apple built exits into it. Non-profits, accredited educational institutions, fee-waived government entities and entirely unmonetised free apps paid nothing. A three-year on-ramp exempted developers under €10 million in global revenue and capped those between €10 million and €50 million at €1 million a year — but only if the tier was declared before the first app crossed a million installs.
Read the shape of that instrument rather than its rates. It grows linearly with how many people download your app and is wholly indifferent to whether any of them spend money — functionally a floor under your cost per acquired user, sitting outside your media cost and therefore invisible to every bidding system you use, Apple’s included.
A commission is a share of what worked. A per-install fee is a charge for showing up.
03Who was actually paying it — read the scope carefully
This is where most of the coverage gets loose, so it is worth being blunt. The Core Technology Fee only ever applied to developers who had signed the Alternative Terms Addendum. If you distributed through the App Store on standard terms and took payment through Apple In-App Purchase — which describes the large majority of apps running Apple Ads campaigns — you never paid €0.50 for anything. The fee was the price of the door to alternative distribution, not a tax on the App Store.
So for the median Apple Ads advertiser, the operative change on 1 October is narrower than the headlines imply: commission on Apple IAP moves from 30% to 26%, and only on EU storefronts. If you are in the Small Business Program at 15%, or your subscriptions are past their first year at 15%, nothing about your net revenue changes at all.
That does not make the structural point less real; it relocates it. The developers for whom the switch is transformative are those who weighed alternative distribution and found the per-install economics prohibitive. They have just had a fixed marginal cost per user replaced with a 5% cut of transactions. Whether that changes distribution behaviour at scale is an empirical question nobody can answer yet.
→ THE HONEST FRAME
Two changes, two audiences, one date
Change one — 30% to 26% — affects almost every EU-selling developer by a modest amount. Change two — CTF to CTC — affects a small number by a large amount and changes the shape of their acquisition economics. Conflating them is wrong for both audiences.
04What it does to your maximum cost per tap
Start from the ceiling. A defensible maximum tap price on Apple Ads is:
| Term | What it is |
|---|
| Max CPT | (net revenue per download × tap-to-download conversion rate) ÷ payback multiple |
| Net revenue per download | Gross revenue per download, after Apple’s cut and after any fixed per-install charge |
| Conversion rate | Share of taps that become downloads — Apple reports over 60% at the top of search results |
| Payback multiple | How many times over you require the cohort to return the spend, inside your window |
Now run both instruments through it. Everything in the next three paragraphs is derived illustration, not published data — the inputs are chosen to make the mechanism legible, and your numbers will differ.
Under a per-install fee. Take an app on alternative terms, past the million-install threshold, earning €1.00 of gross revenue per download at a 17% effective cut. Net revenue per download is €1.00 × 0.83 − €0.50 = €0.33. The €0.50 is not a percentage of anything; it is subtracted whole. At a 60% tap-to-download rate and a 1.0× payback target, the ceiling tap price is €0.33 × 0.60 = €0.20.
Under a commission. Same app, same €1.00 gross per download, now paying the 5% Core Technology Commission. Net revenue is €0.95, and the ceiling tap price becomes €0.95 × 0.60 = €0.57 — same media, same users, a ceiling nearly three times higher purely because the charge stopped being attached to the download.
For the ordinary App Store advertiser, the move is smaller and easier to state. Net revenue per download rises by the ratio 0.74 ÷ 0.70, which is about 5.7% — again, derived here, not an Apple figure. Holding conversion rate and payback multiple constant, your EU ceiling bid rises by that same 5.7%. Real, worth capturing, and smaller than the gap between two vendors’ published cost-per-tap benchmarks for the same market — which is a good reason to compute this from your own revenue rather than from a benchmark table.
05Why a per-install fee punishes cheap traffic hardest
Here is the part that generalises beyond Europe. In almost every consumer app, revenue concentrates in a small paying minority while costs spread across the whole install base. A charge levied per install lands overwhelmingly on users who never generate a cent — and the lower your paying share, the more of that fee is pure loss.
Directionally: if 3% of your installs ever pay, a €0.50 per-install charge is effectively €16.67 per paying user before you buy a single tap. At 10% it is €5.00. The fee is regressive with respect to monetisation rate — cheapest for apps that convert well, most punitive for apps that acquire broadly and monetise thinly.
So the CTF was, quietly, a subsidy for narrow high-intent acquisition and a penalty on volume. Its removal flattens that — and removes one structural reason to avoid cheap traffic. It was always the weaker reason. The stronger one has nothing to do with Apple’s fee schedule: optimising toward a low cost per install selects for users who are cheap to reach precisely because they are worth less. That survives the fee change intact, and the fee change is a good moment to check your account is not leaning on the old crutch — the ROAS audit framework is the sequence for that.
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06The high-ARPU read: headroom is worth most where intent is declared
A commission cut gives you headroom. Headroom is only useful if you can spend it somewhere that reliably converts it into revenue, and that is a claim about channel, not about fee schedules.
The case for putting EU headroom into Apple Ads rests on two published facts and one structural one. First, the App Store audience spends conspicuously more per head: across 2025 aggregates, App Store consumer spend has been reported at roughly $117 billion against Google Play’s $49 billion on about 142 billion combined downloads, of which Play carries roughly three times more. Dividing gives approximately $3.30 versus $0.46 per download — derived, not cited, because the two sides come from different source sets and Sensor Tower’s 2026 report gives a combined $167 billion across 149 billion downloads with no clean platform split. Order of magnitude, not a decimal.
Second, App Store search is where declared intent surfaces. Apple reports that nearly 65% of downloads happen directly after a search, and — on data spanning November 2024 to October 2025 — more than a 60% average conversion rate for ads at the top of search results. A user typing your category into the App Store search field has already told you what they want. Nothing in display or social gives you that declaration before you pay.
Third, and structurally: Apple Ads is priced per tap on a keyword, which is the most granular place a marginal euro of headroom can be deployed. A 5.7% ceiling increase spread across a broad social buy is noise. The same 5.7% applied to a specific set of high-intent EU keywords that were previously a fraction under your bid ceiling is the difference between not competing and competing. That is the practical use of this news: not a budget increase, a re-ranking of which keywords clear the bar.
One caution. Multi-slot search results finished rolling out globally at the end of March 2026, so the auction now places up to two ads per query and the position economics of a keyword are not what they were when those conversion figures were gathered. Re-rank against post-multi-slot placement behaviour, not a 2025 mental model.
07What to do before 1 October — and what not to do
Do decide your payment configuration deliberately. The twelve-month lock across all EU storefronts is the most consequential operational constraint in the package. Offering Apple IAP alongside alternative payments is newly permitted, which makes the decision multi-dimensional for the first time — and then freezes it for a year.
Do separate EU storefronts in your reporting now. If EU and non-EU geographies share one blended ROAS line, the commission change will surface in October as unexplained drift you cannot isolate. Split the reporting in September, while the pre-change baseline still exists — our weekly review cadence has a geo-split step for exactly this.
Do check your minimum OS assumptions. The terms require iOS/iPadOS 26.2 as a floor, so if a meaningful share of your EU base sits below it, the effective date for your users is later than 1 October.
Do not move your bids on 1 October. Revenue per download is something you observe from matured cohorts, not something you compute from a press release and paste into a bid. Let October cohorts run far enough to read realised net revenue on EU storefronts, recompute the ceiling from what you see, and adjust after. Changing the fee structure and the bids in the same week means never knowing which moved your numbers.
Do not assume this reaches the United States. Some coverage frames the EU package as a preview of a US settlement. That is analysis, not announcement — Apple has committed to nothing of the kind.
Do not read a commission cut as a demand signal. Cheaper terms raise your ceiling; they do not make users want your app more. A keyword that was unprofitable at a 30% cut moves 5.7% closer to viability and no further, and most of what looks unprofitable is not 4% away from working.
08What nobody knows yet
Naming the gaps is more useful than filling them with confident guesses, so:
- No EU-specific Apple Ads benchmark set exists. Every published cost-per-tap dataset reports globally, by country, or for the US — none isolates the EU as a bloc, so there is no baseline against which to measure whether this moved EU auction prices at all.
- Apple discloses no advertising revenue line item. Services revenue was approximately $30.7 billion, up 12% year over year in the most recent quarter, with the CFO citing June-quarter records in advertising among other categories — but no figure for advertising itself. Any claim about how much of this Apple recovers through ads is invention.
- The pass-through question is open. Whether a 4-point commission cut reaches consumers as lower prices, developers as margin, or media as higher bids is exactly the question Apple’s own November 2025 DMA study set out to examine. There is no post-hoc evidence yet because the terms have not taken effect.
- Behavioural response to the CTC is unmeasured. Nobody has estimated how many developers will now adopt alternative distribution who would not have under a per-install fee, and there is no precedent to reason from.
Two standing corrections, because both keep appearing in coverage of this story: the platform has been Apple Ads, not Apple Search Ads, since April 2025, and the Custom Product Page limit has been 70, not 35, since October 2025.
The summary is short. A tax on downloads became a tax on revenue, and a tax on revenue is the one that lets you bid what a user is actually worth. For most Apple Ads advertisers that is about 5.7% of ceiling on EU storefronts — small, real, and only capturable if you were measuring EU revenue separately to begin with.
→ SOURCES
- Apple Newsroom, Apple announces changes for apps in the European Union, 18 August 2026.
- PPC Land, Apple kills EU per-install fee for 5% commission on non-App Store sales, 18 August 2026.
- TechCrunch, Apple overhauls its EU App Store fees, loosens rules for alternative app stores, 18 August 2026.
- 9to5Mac, Apple overhauls App Store fees in the EU with new unified terms, 18 August 2026.
- Apple Developer, Core Technology Fee overview.
- RevenueCat, Apple’s June 2025 EU update: one entitlement, three fees, and CTF’s 2026 sunset.
- AppleInsider, Apple’s EU App Store changes are big, and a preview of what’s coming in the US, 18 August 2026.
- Neowin, Apple simplifies EU App Store terms with new commission structure for developers.
- gHacks, Apple replaces per-install EU Core Technology Fee with a flat 5% commission, 19 August 2026.
- Tech Times, Apple EU settlement locks in 5% App Store rate with notarization still in place, 19 August 2026.
- Apple Developer, What happens to app prices when developers pay lower commission fees?, November 2025.
- Tech Policy Press, Understanding the Apple and Meta non-compliance decisions under the Digital Markets Act.
- PPC Land, Apple will squeeze more ads into App Store search — here’s what changes (Apple’s search conversion and post-search download figures).
- PPC Land, Apple’s record $111bn quarter: Services, ads, and a CEO farewell.
- TechCrunch, Apple adds more carve-outs to its EU Core Technology Fee after criticism from devs.
- MacDailyNews, Apple simplifies EU App Store fees, replaces complex structure with flat commissions, 19 August 2026.
- AppleMagazine, EU App Store fees overhauled to settle DMA dispute.