Apple Working on Solution for EU Core Technology Fee Possibly Bankrupting Apps That Go Unexpectedly Viral

[one more]

So you think Apple should just allow everyone to distribute their apps on the App Store for free?

EDIT so people stop replying to say the same thing: The Core Technology Fee applies to any developer who accepts the new EU terms, whether they remain in the App Store or not. If Apple got rid of the CTF, developers would be able to continue distributing their apps on the App Store without paying Apple a dime.

Developers who are using Apple’s App Store pay Apple $99 per year, which is way more than a dime.

 

[djphat2000]

Some here who are against the DMA would tell him:

(1) Tough 💩
(2) No one is forcing him to develop for iOS
(3) If he doesn't like it he can go develop for Android
(4) Apple absolutely deserves (yes, deserves) that $$$
(5) The annual developer fee is not enough
(6) Apple needs to be compensated for the infrastructure that Apple is not paying for

iOS 17.4 SDK introduces new capabilities that let marketplace developers build and distribute marketplace iOS apps as part of an alternative app marketplace in the EU. These apps can install and support software on devices, access data across a catalog of apps, manage users’ purchases and subscriptions, and more. Marketplace apps must meet Notarization requirements, like all iOS apps, and can only be installed from the marketplace developer’s website.


Did I miss anything?

(6) Apple needs to be compensated for the infrastructure that Apple is not paying for

Not entirely true. Apple is introducing new capabilities that LET it exist. That costs. So they should be compensated.
If anyone doesn't like it.

(1) Tough 💩
(2) No one is forcing him to develop for iOS
(3) If he doesn't like it he can go develop for Android
(4) Apple absolutely deserves (yes, deserves) that $$$
(5) The annual developer fee is not enough

 

[gsurf123]

The fee applies to apps not distributed on the App Store though.

Apple is free to charge a hosting fee for the App Store so that all of the free apps that pay nothing but get tens of millions of downloads pay their fair share.

Apple should not be entitled to a cut from apps that users download from external app stores of websites, much as they are not entitled to a cut for similar apps downloaded on a Mac.

The development tools are not "free" no matter what anyone thinks. The $99 fee is just to recover basic costs of having an account and probably includes a few app reviews. No one works for free so. Would it be ok to set up a tent or table in a shopping center to sell your wares while the rest of the businesses in the shopping center have lease agreements? The answer is no, but you would be surprised by the number of people who think this is ok.

 

[laptech]

The CTF only serves one purpose and that is to demotivate app developers from making good app's for the EU because they know if they make a good app they could incur large costs. This will mean EU app users will suffer because all the newly made good apps will appear on the US app store but not made available to EU users because the app dev would have to comply with DMA rules which means the dev would have to sign up to the new business terms which involves having to use CTF.

In my opinion the EU will see view the CTF as Apples way of attacking the EU because they dared to take on Apple.

 

[User 6502]

The development tools are not "free" no matter what anyone thinks. The $99 fee is just to recover basic costs of having an account and probably includes a few app reviews. No one works for free so. Would it be ok to set up a tent or table in a shopping center to sell your wares while the rest of the businesses in the shopping center have lease agreements? The answer is no, but you would be surprised by the number of people who think this is ok.

People publishing outside of the App Store don’t require any ‘space’ in Apple Store, nor reviews or other associated services. They are perfectly equivalent to people writing apps for Mac who chose not to use the Mac App Store. And, surprise surprise, they only pay $99 and nothing else, and thhat has been the case even before the iPhone existed. So yeah, not only this would he perfectly ok, but it also exactly what happens already.

 

[jarman92]

if it is distributed outside of the apple app store, then Apple should have no right to any fees or income.

So you’re OK with Apple charging for access to Xcode, APIs and SDKs, notarization, documentation, developer support, etc.?

 

[koil]

Looking at the DMA they posit that a reduction in App Store commission from 30% to 15% would reduce prices for consumers.

Does anyone have any figures as to what happened to app prices once Apple had introduced the 15% commission rate? Did the prices go down for consumers or did the developers simply pocket the difference?

I may be wrong here, but I don't think Apple provides companies with any ability to change pricing mid-contract, so with that in mind, why would they? Apple takes 30% the first year, and doesn't allow lock-in for longer to my knowledge (as in, I don't think I've ever seen any longer subscription options on iOS apps), so developers would have no way of knowing that the customer will be a customer for longer than a year and therefore can't really take the 15% commission rate into account.

This also feels very deliberate on the part of Apple if you ask me.

 

[Rogifan]

The development tools are not "free" no matter what anyone thinks. The $99 fee is just to recover basic costs of having an account and probably includes a few app reviews. No one works for free so. Would it be ok to set up a tent or table in a shopping center to sell your wares while the rest of the businesses in the shopping center have lease agreements? The answer is no, but you would be surprised by the number of people who think this is ok.

So what does a $1000 iPhone pay for?

 

[spazzcat]

They already do. It’s the $99 per year developer fee.

The $99 fee is for signing apps, you get access to most of the tools without the $99 fee.

 

[spazzcat]

Looking at the DMA they posit that a reduction in App Store commission from 30% to 15% would reduce prices for consumers.

Does anyone have any figures as to what happened to app prices once Apple had introduced the 15% commission rate? Did the prices go down for consumers or did the developers simply pocket the difference?

Prices normally don't down in this situation and developer cost can and most likely go up when they leave the App Store and most smart devs know this.

 

[spazzcat]

So what does a $1000 iPhone pay for?

OS development, R&D on hardware, marketing, part cost, factory retooling, etc...

 

[mrochester]

People publishing outside of the App Store don’t require any ‘space’ in Apple Store, nor reviews or other associated services. They are perfectly equivalent to people writing apps for Mac who chose not to use the Mac App Store. And, surprise surprise, they only pay $99 and nothing else, and thhat has been the case even before the iPhone existed. So yeah, not only this would he perfectly ok, but it also exactly what happens already.

But that doesn’t mean it shouldn’t happen differently on iOS.

 

[koil]

People publishing outside of the App Store don’t require any ‘space’ in Apple Store, nor reviews or other associated services. They are perfectly equivalent to people writing apps for Mac who chose not to use the Mac App Store. And, surprise surprise, they only pay $99 and nothing else, and thhat has been the case even before the iPhone existed. So yeah, not only this would he perfectly ok, but it also exactly what happens already.

Mac app developers that aren't releasing their apps on the Mac App Store don't pay $99/year, what are you talking about? I can build a .dmg of an app without having an Apple account entirely, yes, without notarisation users will have to jump through hoops to use my software, that's a behaviour I wish regulators would call them out on, but it's at least possible on the Mac. That's what ultimately needs to happen on iOS as well.

 

[Nuno Lopes]

I guess businesses will deposit their free offering in the Apple App Store and the payed somewhere else.

 

[Colpeas]

What a load of crap. If one alrady pays for a developer’s license and choses to distribute the app in an altstore, how come apple feels entitled to any money besides the fees already collected? Especially in case of free apps. This has turned apple’s already bad anti-competitive practices even worse and there is absolutely no excuse for this behaviour.

And don’t give that crap about “iphone is a plaform, without which noone would make any money at all” - just NO.
First, you could say the same about any desktop operating system, yet the devs aren’t exploited by any such guidelines and
Second, iphone would be nothing without apps. It’s a symbiotic relationship, yet apple feels like it has the right to bully.

I hope the european commission fines Apple SO HARD for this.

 

[djphat2000]

Move to a subscription model. Any free app should be .99 euros a year. If you're lucky and go viral. At 1 million downloads you made 1 million euros for your troubles. If you really make it big. You will owe Apple .50 euro on anything past 1 million. That continues to be installed past the 1st year. If you make it a .99 euro sub per year. It's still VERY cheap. You make money as a developer. And you never worry about Apple's cut. 9 million (past the first 1 million so 10 total). You will owe Apple 4.5 million euro's, and can pay for that without worrying. If people "keep" the app so it counts towards the down load. You will not be facing a bill you can't pay. If they remove the app after the first year. You don't have to worry about paying Apple for those that didn't keep the app.

I don't see a better way. But, I'm sure Apple will figure it out.

 

[wirefire]

The fee applies to apps not distributed on the App Store though.

Apple is free to charge a hosting fee for the App Store so that all of the free apps that pay nothing but get tens of millions of downloads pay their fair share.

Apple should not be entitled to a cut from apps that users download from external app stores of websites, much as they are not entitled to a cut for similar apps downloaded on a Mac.

Hello, I am a company and I have a product that millions of people own and use on a daily basis. I can provide you direct access to all of these potential customers. Advertisers pay TV broadcasters for access to their viewers. Apple wants developers to pay for access to their customer base. Apple was "kind" in that they placed the financial burden on revenue. A developer only paid if they made money. Advertisers on the other hand have to pay no matter what the outcome of their advertisements. Access to a customer base has value. Apple had that figured out and then the EU basically says "you can't monetize that way" and then everyone complains about the alternatives. so is the problem the way they are monetizing? or is it because they are monetizing like any good company should?

 

[mrochester]

I may be wrong here, but I don't think Apple provides companies with any ability to change pricing mid-contract, so with that in mind, why would they? Apple takes 30% the first year, and doesn't allow lock-in for longer to my knowledge (as in, I don't think I've ever seen any longer subscription options on iOS apps), so developers would have no way of knowing that the customer will be a customer for longer than a year and therefore can't really take the 15% commission rate into account.

This also feels very deliberate on the part of Apple if you ask me.

I’m talking about app purchase prices not subscriptions. Developers who make under 1 million USD pay a 15% commission. Have those app developers passed on the saving by reducing the price of their app?

 

[wanha]

It blows my fragile little mind that there are people arguing that for profit businesses should have gratuitous access to Apple's infrastructure for zero cost.

In what other industry are we okay mandating the same?

 

[koil]

Apple had that figured out and then the EU basically says "you can't monetize that way" and then everyone complains about the alternatives. so is the problem the way they are monetizing? or is it because they are monetizing like any good company should?

That's not at all what the EU says (with the DMA)... they're rather saying "good job, you managed to become so huge that you're literally forcing developers to have to work with you, that comes with responsibilities, so now you have to make some changes".

Apples monetisation isn't going to change, users aren't going to leave the App Store, what will happen is users will be able to install apps Apple doesn't want to have anything to do with from external distribution, and it will more than likely attract a bunch of holdout users to the platform actually, I do 100% seriously expect Apple will make more money by acting in good faith and making app installation as open as it is on Android. And they'd pretty much kill the jailbreaking community at the same time.

I’m talking about app purchase prices not subscriptions. Developers who make under 1 million USD pay a 15% commission. Have those app developers passed on the saving by reducing the price of their app?

Reduce from what? You're talking about developers who were never above the 30% bracket right? How would you determine if they're passing on the "savings" to their customers when there aren't any "savings"? Or are you talking about instances where apps blow up and prices increase because they're now above the 30% bracket?

 

[Sophisticatednut]

Because there are only two players, which the EU has deemed to be not enough competition
There’s nowhere to actually “go” while running a viable cross platform business, which is a requirement for a large swath of App companies. Many can’t just “not be on iOS”

This is the issue the DMA was specifically created for

With respect, you’re missing sort of the key point of the DMA

I really encourage you to listen to John Siracusa on ATP talk about this.

Well with due respect it has nothing to do with it only being two players. EU already established that android and iOS aren’t competitors as they are two separate markets.

The issue is the gate keeping effect they have on the larger market when everyone who wants to acces consumers are forced into paying in to a vertically integrated system that hinder health market competition for the developers.

Oh my, so much going on here...first of all, I do understand that. Though I thought it blatantly obvious that, should Apple forego the Core Technology Fee for apps outside the App Store, literally every single large developer (and many, many small and mid-size ones) would leave the App Store so they wouldn't have to pay any fees; it would be a no-brainer. That would be the absolute worst-case scenario for both Apple and for iOS users.

Any developer choosing to list an app outside the App Store has already taken advantage of years of Apple's developer support and infrastructure—countless APIs, documentation, developer sessions, Xcode, etc. The $99 developer fee is self-evidently a de minimus fee that prevents spam and abuse—it has never been a fee for use of Apple's resources.

If it were such a fee, it would undoubtedly be much higher, thus boxing many small developers out of the program entirely. Unless it were based on the size of the developer, in which case we're pretty much right back to where we started.

Not sure where you're quoting from, but it is abundantly clear that the annual developer fee provides access to such resources but does not cover the cost to Apple of providing those resources. $99/year is a pittance and serves only to prevent spam and abuse of the system.

As already explained extensively, here and elsewhere, the CTF covers Apple's decade-plus of work on the iPhone/App Store, Xcode, APIs and SDKs, developer sessions, documentation, regulatory compliance, marketing...

the $99 is a token amount to keep load down on issuing certs, it's not about offsetting costs as much as it is about rate limiting, the developer access is a loss leader for the platform. It isnt subsidized by app sales, it's subsidized by people buying Apple gear at all. Without developers and an app ecosystem the platform fails. A $999 fee would be a death sentence, it would never happen.

Well if it’s so self evident then apple should write it clearly, as heavily implied by their marketing and information it’s not. And the 99$ membership fee is apparently all all inclusive.

Those wanting Apple to forge CTFs will probably also want Apple to indemnify them when a patent holder wins a judgment for the tech they are using.
The EU will not be in any legal position to tell Apple they have to give their IP away free. In that case, the WTO has the last word.

Why would they? Apple and other coil just have to go after the developers in court.

EU is completely within their legal rights, as nothing of apples IP is given away for free.
It’s for Apple to prove this absurd statement.

Until Apple wins a lawsuit against the Jailbreaking community who “blatantly” use their IP without compensation they have no legal leg to stand on.

I think I might agree that non-App store competing store fronts have to have some sort of fee associated; otherwise nobody is going to release things via Apple's App Store.

If you want something that deals with tech broken or hard to deal with; just let politicians decide how it should be regulated.

Easy do a better service than the other.

Why doesn't the EU just come up with the solution? They are good at telling everyone how to run things (terribly) after all.

They aren’t your friend, you have personal responsibility to come up with your own solutions. There’s plenty of examples already implemented by others.

And I will give away a free solution to Apple:
Any developer who earns more than 1 million pays 2% of revenue as a Core technology fee.

And any free apps without In app purchases pays zero.

And any app who doesn’t use apples services pays 0%

 

[Beautyspin]

It’s called business. The goal is to make as big of a profit as possible. You should try it sometime.

You want to sell in my store? You pay rent. Go to another store if you don’t like it. Spoiler: they all charge rent.

Greed occurs on both sides: developers want to keep as much of their earnings
as possible; Apple wants to maximize App Store commissions. One side isn’t more morally superior than the other. It’s just business.

If companies really found the App Store to be a loss, they’d simply leave and tell Apple to go * themselves. That’s not the case here. They want to tell Apple off and still benefit from its platform.

Aka: the big greedy companies (Spotify and Epic) want to increase their margins.

It has absolutely nothing to do with benefiting the consumer or whatever nonsense people cook up.

Margins will get wider, price will stay the same (or go up due to “inflation”) and quality of the external apps will most likely go down and have security implications that we have yet to discover.

I’m done arguing with you.

Good suggestion. That is why the EU is hell bent on alternative appstores. We will see who charges how much rent once there are several alternative appstores.

Since the main objective of DMA is to establish alternative appstores, they would have to deal with CTF and they will. Apple will probably not like the solution, but they were asking for it.

 

[Sophisticatednut]

Might want to check that with a lawyer. Fair use doctrine only allows you to use ROM dumps of things you own, not things you don't. It doesn't cover if it's possible to buy the titles or not.

Fair use doctrine doesn’t exist in EU.

Making it more complicated.
You ether have a right to use something carte blanche or you don’t.

Example its a private copy you made of something you own.

Ether it’s a legal right you have or not. There’s no middle ground that is context dependent.

 

[mrochester]

That's not at all what the EU says (with the DMA)... they're rather saying "good job, you managed to become so huge that you're literally forcing developers to have to work with you, that comes with responsibilities, so now you have to make some changes".

Apples monetisation isn't going to change, users aren't going to leave the App Store, what will happen is users will be able to install apps Apple doesn't want to have anything to do with from external distribution, and it will more than likely attract a bunch of holdout users to the platform actually, I do 100% seriously expect Apple will make more money by acting in good faith and making app installation as open as it is on Android. And they'd pretty much kill the jailbreaking community at the same time.


Reduce from what? You're talking about developers who were never above the 30% bracket right? How would you determine if they're passing on the "savings" to their customers when there aren't any "savings"? Or are you talking about instances where apps blow up and prices increase because they're now above the 30% bracket?

Well if you charged £1 for your app when you paid a 30% commission, how much are you now charging for your app when only paying a 15% commission? Has that saving been passed onto the consumer buying your app, or has the developer simply pocketed the money for themselves?

 

[Joe The Dragon]

The development tools are not "free" no matter what anyone thinks. The $99 fee is just to recover basic costs of having an account and probably includes a few app reviews. No one works for free so. Would it be ok to set up a tent or table in a shopping center to sell your wares while the rest of the businesses in the shopping center have lease agreements? The answer is no, but you would be surprised by the number of people who think this is ok.

google play has lower fees and even fee wavers for some free apps and they allow alot more in the play store then apple does