By Dan Moren
March 18, 2024 4:46 PM PT
Apple’s still thinking about the Core Technology Fee in Europe
Developer Steve Troughton-Smith watched all of today’s workshop between Apple and the EU on the Digital Markets Act and posted some highlights on Mastodon.
Of particular interest was an exchange between Apple’s representatives and Riley Testut, the developer of AltStore, an existing third-party places to get apps for jailbroken iPhones. Testut has already announced that AltStore will be available as a third-party app marketplace in Europe under the DMA. I’ll embed the post with the video below because it’s worth watching, but 9to5Mac has transcribed it as well.
During the workshop, Testut used his time to ask about the Core Technology Fee. Under Apple’s new business terms in Europe (required for apps looking to be distributed via non-Apple app marketplaces or the web), there’s a €0.50 fee per app install over the first million. Testut rightly points out that a free app, such as the one he made in high school, that becomes popular could easily accrue enough costs to ruin a young developer’s life.
Apple VP of Legal Kyle Andeer responded sympathetically, saying that the company is continuing to try and find a good solution, and to “stay tuned.”
Obviously, we’ve already seen plenty of alterations in Apple’s original DMA plans, including the late addition of Web Distribution, but this certainly seems to suggest that further changes are coming.
The CTF has been a point of contention amongst developers; it certainly provides a potential disincentive for those looking to distribute apps outside the App Store—especially in cases where those apps derive revenue from other places, such as subscriptions not available via in-app purchase or advertising. (And yes, to be clear, that is exactly why Apple is putting that fee in place.)1
But free apps in particular seem to be the biggest sticking point. When the App Store debuted with the commission model, it was a relatively simple matter to say that if an app made no revenue, then Apple charged the developer nothing. But not all free apps are created equal, as the boom for in-app ads and subscription services have shown. That’s a bed of Apple’s own making, but it shouldn’t be surprising the company is trying to course correct to close those loopholes—that same impetus has been at the heart of a lot of its questionable App Store policy decisions over the past decade-plus.
Still, apps that are completely free—including open-source apps—certainly don’t seem like they should be subject to the Core Technology Fee. The question, from Apple’s perspective, is how to police that? What about, say, an app that’s distributed for free outside the App Store but has a big Patreon community that brings in a lot of money?
That in turn leads to the root of the question: does Apple deserve to get a cut of apps not distributed from its marketplace? There’s no arguing that the company has benefited from the huge ecosystem of software available for its devices, especially the iPhone. And as the CTF is currently structured, it could very well lead to a chilling effect amongst young developers who can’t risk the downsides—a category of people who Apple has made a big deal of specifically championing
I’m skeptical the entire CTF will end up discarded, but I do suspect that there will be additional carve-outs to come, especially for free/open-source apps (or perhaps Apple will greatly increase the amount of installs before the CTF is triggered, thus even more specifically targeting its biggest rivals). It’s been almost a week since the last changes, so keep your eyes peeled to see if a new batch is incoming.
- As a poison pill, it seems particularly aimed at other big tech companies who might be tempted to go a third-party route to have more control over their own apps, but pay nothing under the current terms. Hi Spotify and Meta! ↩
[Dan Moren is the East Coast Bureau Chief of Six Colors. You can find him on Mastodon at @dmoren@zeppelin.flights or reach him by email at dan@sixcolors.com. His latest novel, the supernatural detective story All Souls Lost, is out now.]
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