by Dan Moren
Apple tweaks Core Technology Fee terms for free apps and small developers
Apple continues to revise its approach to complying with Europe’s Digital Markets Act, today announcing a pair of exceptions to its Core Technology Fee. The first pertains to apps that are totally free:
First, no CTF is required if a developer has no revenue whatsoever. This includes creating a free app without monetization that is not related to revenue of any kind (physical, digital, advertising, or otherwise). This condition is intended to give students, hobbyists, and other non-commercial developers an opportunity to create a popular app without paying the CTF.
This would seem to be the exception hinted at by Apple’s Kyle Andeer during the company’s DMA workshop in March. The rule itself seems pretty reasonable: if you don’t intend to make any money off an app, you pay nothing, even if it goes amazingly viral.
The second rule is a little more complex and is aimed at small developers:
Second, small developers (less than €10 million in global annual business revenue*) that adopt the alternative business terms receive a 3-year free on-ramp to the CTF to help them create innovative apps and rapidly grow their business. Within this 3-year period, if a small developer that hasn’t previously exceeded one million first annual installs crosses the threshold for the first time, they won’t pay the CTF, even if they continue to exceed one million first annual installs during that time. If a small developer grows to earn global revenue between €10 million and €50 million within the 3-year on-ramp period, they’ll start to pay the CTF after one million first annual installs up to a cap of €1 million per year.
So, basically, if you’re making a small amount of money, you can avoid paying the CTF for three years, giving you a chance to get to the point where you can afford to pay Apple’s fee. (Once again, reinforcing that the target of this rule seems to be large companies paying nothing: Meta, Spotify, etc.)
If that rule seems to raise a lot of questions, you’re not alone: Apple’s updated its Core Technology Fee documentation to address the specifics of the rule.
In addition to these two adjustments, Apple also confirmed that iPadOS will be updated “later this fall” to comply with the European Commission’s recent ruling that it constitutes a gatekeeper platform.