* Move estimated to save Chinese developers $873 million

annually

* App Store fees are targeted by regulators worldwide

* Cut comes after pressure from Chinese regulators in

huge market

By Laurie Chen

BEIJING, March 13 (Reuters) - Apple ( AAPL ) said on

Thursday it would lower the commission fees collected by the

company from its App Store in mainland China in a huge win for

Chinese developers following apparent pressure from regulators

in the U.S. tech giant's second-largest market.

Fees for in-app purchases and paid transactions will be lowered

to 25% from 30% starting on Sunday, the California-headquartered

company said in a statement on its website. In-app purchase

transactions for developers belonging to Apple's ( AAPL ) small business

and mini apps partner programmes will be cut to 12% from 15%.

"Mini apps" refer to smaller applications that operate

within a larger application such as Tencent's WeChat.

The move is a breakthrough for Chinese app developers and

operators of "super apps" including Tencent and TikTok owner

ByteDance, whose platforms host many smaller apps created by

third-party developers.

The cut is estimated to save Chinese developers more than 6

billion yuan ($873 million) in operating costs annually, the

state-owned Economic Daily said in a Thursday report that framed

the measure as a win for Chinese digital consumers.

"This adjustment will ... improve consumption choices and

information transparency," the Economic Daily said.

"The premium for digital goods and services on the iOS side

will be gradually eliminated, and the prices of membership

subscriptions, game recharges, live broadcast tips, mini

programs and other scenarios are expected to decrease, which is

expected to save consumers up to nearly 1 billion yuan per

year."

WORLDWIDE SCRUTINY OF 'APPLE TAX'

The 30% "Apple Tax" remains a major target of antitrust scrutiny

by regulators worldwide. The EU introduced new legislation in

2024 that forced Apple ( AAPL ) to lower commission fees to 10% to 17%

for developers. In the U.S., Apple ( AAPL ) allows users to pay in-app

fees via alternative payment methods.

"In China's case, (Apple ( AAPL )) 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 ( AAPL ) was targeted by the campaign in 2013, when its

after-sales service was criticised by state broadcaster CCTV,

forcing the company to publicly apologise.

In future, the Chinese government may request Apple ( AAPL ) to

collect App Store revenues in China instead of overseas, and

further tighten regulatory oversight for foreign apps published

in China, Bishop said.

Apple ( AAPL ) has previously taken down apps such as virtual private

networks (VPNs) from its China App Store at the request of

Chinese internet regulators.

All internet-connected devices carry an individual code

which discloses their location, and VPNs allow users to hide

their location by assigning their device a new code. Many

Chinese users and foreign firms operating in China use them to

bypass strict domestic internet censorship of foreign websites.

China's antitrust regulator was mulling an investigation into

Apple's ( AAPL ) policies and App Store fees, Bloomberg News reported

last year, while Chinese consumers filed an antitrust complaint

over the firm's app fee structure last October. Google

cut Android developer fees worldwide last week.

Apple's ( AAPL ) fee reduction also applies to international

developers whose apps are available on the China App Store.

"Duolingo, the top-grossing education app in China, makes about

$50 million a year from the Chinese market and this will be

saving them a decent amount of money," Bishop added.