EU Core Technology Fee for small & non-profit developers pared way back

AppleInsider

Responding to criticism that its Core Technology Fee for EU developers could see small App Store developers owing Apple excessive fees, the company has revised its rules for eligibility.

European Union flags

As part of complying with the EU's mandate that it open up the iPhone to third-party app stores, Apple established a Core Technology Fee that would be levied on developers for the use of its services. Some developers would not have to pay at all, but others would see fees of half a Euro per install, after a certain threshold, and Apple released an online calculator to help companies work out those fees.

Apple had already announced that the Core Technology Fee would not apply to education and government bodies. It also said that developers would not have to pay the Core Technology Fee until such time as they exceeded one million first-installs of an app in a year.

It was this last point that proved to be controversial, however. Under the original rules, it would be conceivably possible for a free app to go viral.

Once it exceeded a million downloads, its developer could owe Apple upwards of $500,000 -- while not earning any income.

In March 2024, Apple acknowledged the possibility and asked developers to "stay tuned" as they worked on it. Now they've worked on it, and have revised who pays the Core Technology Fee explicitly to prevent this problem.

As of now, Apple has created two new tiers of payments for the Core Technology Fee, depending on the size of the developer and whether it is profit-making.

Students and freeware developers

A developer who has no revenue from any global business -- so not just from one given app but from any source -- will no longer have to pay the Core Technology Fee at all. This is meant to mean that developers in education, or just intending to make freeware, will not be hit with thousands of euro in fees.

Such developers will have to specifically register as a non-profit one with Apple -- and they will have to do this every year. There is no limit on how long they can remain as a non-profit, however.

Small developers

Apple defines a small developer as one earning under 10 million Euros (approximately $10.7 million) in revenue globally. These developers must also not have already had more than one million annual installs for an app.

Now under the newly altered rules, Apple says that such developers will get a three-year on-ramp to the Core Technology Fee.

There are two parts to how the fee will work for such developers. First, if they now exceed one million first installs at any point during the three years, they will not pay any Core Technology Fee.

Should the developer grow during the three years to revenues of between 10 million and 50 million Euros ($54 million), they will pay the Core Technology Fee when they exceed a million first installs. However, that fee will be capped at 1 million Euros annually ($1.07 million).

If the developer grows still further and exceeds an annual global revenue of 50 million Euros, it will be subject to the same Core Technology Fee as previously outlined.

These new rules apply immediately for iPhone developers. Apple has released updated developer documentation.



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janrichard

I can't believe that Apple has the balls to do this. Imagine if Microsoft (who got slapped down HARD for making their browser default!) had said that every single piece of Windows software could only be bought from Microsoft, and baring that, there would be a kickback that any developer for Windows would have to pay if they had the NERVE to sell their software somewhere else.

Quite frankly Apple disgusts me with this BS.

londor

janrichard said:

Imagine if Microsoft...

You don't have to image it, Microsoft currently does that with the Xbox. Why is Apple's iPhone any different than Xbox, Playstation, etc?

Meson

londor said:

janrichard said:

Imagine if Microsoft...

You don't have to image it, Microsoft currently does that with the Xbox. Why is Apple's iPhone any different than Xbox, Playstation, etc?

The difference is you can go and buy a game from another store (Game Stop, etc.) and Microsoft doesn't get the 30% commission. Only when games are purchased through their game store is their commissions. So if Apple allowed third party stores, then they would be the same as the Xbox. 

londor

Meson said:

The difference is you can go and buy a game from another store (Game Stop, etc.) and Microsoft doesn't get the 30% commission.

Of course they do, Microsoft gets a cut of every copy of a game sold anywhere whether it's a physical or digital copy. 

Meson

londor said:

Meson said:

The difference is you can go and buy a game from another store (Game Stop, etc.) and Microsoft doesn't get the 30% commission.

Of course they do, Microsoft gets a cut of every copy of a game sold anywhere whether it's a physical or digital copy. 

You are correct. It seems that Microsoft does take a 15% cut on third-party games sold physically. It still doesn't make it right though.

I'm not against Apple (or Microsoft or any other company) charging fees, but it needs to be reasonable. Charging fees for sales that are not going through your channel seems excessive, and typically the users are the ones who ends up paying for those fees through higher prices. I'm surprised that you seem to support this. The more fees that Apple charges, the more you pay for your apps/games. Developers will eat some of the fees, but they will pass on most of these excessive fees on to you.

londor

Meson said:

I'm surprised that you seem to support this.

As long as there’s healthy competition in a market I support the right of any company to monetise their platform and IP. Nobody is forcing anyone to buy an iPhone and people do fully knowing what they are getting into. That consumers may have to pay more for an App for the iPhone than for other smartphone because of the fees Apple charges is no different than a consumer having to pay more for the same product at a high end store than at a budget store. If people don’t find value in the Apple platform they will take their business somewhere else.

I, for one, like that Apple tightly controls their platform and am happy to pay a little bit more for that. Are they perfect and agree with everything they do? No, obviously not but overall I’m a happy costumer and the fact that politicians are hell-bent in taking away my choice of a tight and highly integrated platform pisses me off.