'Stay tuned' — Apple's responds to concerns its EU Core Technology Fee could bankrupt developers of viral apps, hints changes are coming

App Store on iPhone
(Image credit: Future)

The way that Apple has chosen to comply with the new European Union Digital Markets Act (DMA) has come in for scrutiny from multiple sides since it came into force earlier this month, but the company has continued to tweak its new rules since that time. Now, it appears Apple is considering yet more changes, this time to the way its Core Technology Fee functions.

The Core Technology Fee is a 0.50 euro fee that app developers must pay when they sign up to Apple's new EU business terms — something they must do to distribute apps outside of the App Store. Those terms require the fee to be paid after the initial 1,000,000 downloads which might sound like a lot. But it's a fee that has caused much concern among developers. Mostly due to the way it will work for apps that are distributed for free.

As developers have already pointed out, a free app that goes viral via social media could very easily be downloaded more than a million times. And if the downloads keep coming, developers would be on the hook for 0.50 euros per download after that point. Those figures add up quickly, especially when your app is free. That's something Apple is now aware of, and it's told a DMA compliance workshop that developers should "stay tuned" for changes that will hopefully alleviate concerns.

Changes afoot

The workshop involved developers as well as Apple VP of regulatory law Kyle Andeers with developer Steve Troughton-Smith sharing a recording of proceedings on Mastodon. Andeers was asked about the Core Technology Fee by developer Riley Testut of Game Boy Advance emulator GBA4iOS fame with the suggestion being that young developers could find themselves in hot water if things stay as they are.

Using GBA4iOS as an example, Testut pointed to the fact the app was downloaded more than 10 million times and that, if that happened under Apple's Core Technology Fee terms, his family would have then been on the hook for five million euros — a figure that would have bankrupted them. The insinuation was that the Core Technology Fee could have a chilling effect on app development, preventing developers — especially young ones — from experimenting. That, Andeers says, isn't what Apple wants.

You can watch the full exchange in the Mastodon post linked above, but the key is Apple's stands on ensuring that developers are able to make free apps available without the fear of being bankrupted. Andeers notes that the lack of a commission from apps sold via third-party app stores is why the Core Technology Fee was introduced, noting that this was forced upon Apple by the DMA.

Andeers did admit that Apple has not yet "figured out that solution" in terms of how it can build a structure that doesn't impact individual developers without "catering to large corporate interests." Andeers says Apple "looked at the data" when designing the Core Technology Fee," admitting that it "didn't see many examples of where you had that viral app or an app just took off that incurred huge costs."

Andeers wrapped up by saying "this is something we need to figure out, and it is something we're working on. So I would say on that one, stay tuned."

As for when we can expect Apple to have its updated Core Technology Fee ready isn't clear, and it seems highly unlikely that it will be scrapped entirely. But anything that helps ensure developers can continue to release apps without the fear of it financially ruining them has to be a positive for Apple and iPhone users alike.

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Oliver Haslam
Contributor

Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too.

Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.