Apple's EU Core Technology Fee Could Bankrupt Freemium App Developers

[2540497]

Nice try Apple. The fee clearly violates the DMA regulation.

Apple has to try because they want money, but they'll be shot down in courts in no time.

The only winners here will be the lawyers.

View attachment 2341241

Regulation - 2022/1925 - EN - EUR-Lex

eur-lex.europa.eu

Not quite sure you understand what an ADS is.

Apple know what they’re doing…

Unfortunately in Europe once you have tabled a law that is that, you can’t say “but it isn’t what I meant, stop!”. It is all about the letter of the law and Apple will be going by the letter of the law.

It could end up in court, but I think, and Apple will think, the EU would lose. Apple will successfully argue a fee would be regarded as reasonable.

 

[rorschach]

Apple doesn’t have to pay this fee themselves while racking up millions of individual instal

Developing and maintaining six operating systems, the App Store, plus dozens of apps and services isn't free. Apple spends far more than what 99% of these companies will spend.

 

[bcortens]

Not quite sure you understand what an ADS is.

Apple know what they’re doing…

Unfortunately in Europe once you have tabled a law that is that, you can’t say “but it isn’t what I meant, stop!”. It is all about the letter of the law and Apple will be going by the letter of the law.

It could end up in court, but I think, and Apple will think, the EU would lose. Apple will successfully argue a fee would be regarded as reasonable.

Except this fee is clearly a steering measure. As others have pointed out, it can create incentive structures that mean that Apple is steering developers to its own App Store and making it financially impossible to create alternative stores.

 

[1129846]

I hope the EU comes down on Apple either a hard NOPE as this is clearly Apple trying to say FU.

 

[bcortens]

Developing and maintaining six operating systems, the App Store, plus dozens of apps and services isn't free. Apple spends far more than what 99% of these companies will spend.

Apple also prices the cost of developing these operating systems into the cost of the hardware. The services are supposed to pay for themselves, if they don't then that isn't on these third party developers.

 

[lkrupp]

What? The ”Apple is greedy and evil” cabal thought Apple would just roll over for the EU?

This crowd doesn’t Apple to make one red cent on anything except selling hardware. The next thing you know they will want Apple’s App Store shut down permanently to “promote” competition.

 

[truthsteve]

We all know that the new terms will be mandatory at the point of your annual account renewal.

Don't see where it says that

It only says "Developers can choose to adopt these new business terms or stay on Apple's existing terms". You "must adopt the new business terms...for alt distribution".

 

[coolfactor]

There we go. Talking about malicious compliance, but worse. Who on earth can easily rack up $48k/mo as freemium app? Does that mean freemium microtransaction model will end as we know it?

The worst part is, iOS devs have no choice but to pay this fee, or suffer being pulled from App Store. And again, Apple doesn’t have to pay this fee themselves while racking up millions of individual install. Who knows how long the “current terms” will last?

If this is not anticompetitive behaviour, I don’t know what it is.

Kind of puts things into perspective about how much Apple is investing into iOS each year, eh?

It's not a free, open-source operating system. If people want that, they have ... (drumroll please).... another choice, Android.

iOS has value, and it's unrealistic to think developers get a free ride while paying nothing to Apple.

There is going to be so much effort put into exploiting the alternative app stores and not paying anything to Apple.

Wild Wild West, here we come.

 

[frenchcamp49er]

The EU got what they asked for

 

[leoplan2]

If you’re app is free, why the hell would you list it in a side loaded store knowing the fees.

This is a non issue.

Open Source apps maybe?

 

[erikkfi]

Counterfactual: Apple announces that every macOS app install is subject to the same fee structure. You all support that just like you do for iOS? Closed, locked-down platforms are good? That's what you tech people think?

 

[rorschach]

If apple really wants to fight on this ground they will be forced to start accounting for and documenting how they fund iOS development. If the majority of iOS development funding comes (as I suspect) from sales of iPhones then they are going to lose this fight.

As I've also said elsewhere, if we start to try and account for the value of Apple's APIs vs the value of having a thriving third party ecosystem I'm also not sure Apple would like that accounting either.

Apple apparently does like that accounting, because that's what the charges are for. Just because you have a few greedy developers who want something for nothing doesn't mean that what they want for free isn't valuable. It is entirely unfair to demand Apple or any other company to give away their products for free. I doubt even the EU expects that. Apple has been meeting with EU officials and they have almost certainly already reviewed this plan.

 

[truthsteve]

who cares what steve troughton smith smith says, why does MacRumors keep quoting him?

he hasn't done a single worthy thing in his career. he's like the Paris Hilton of the developer community.

 

[bcortens]

Kind of puts things into perspective about how much Apple is investing into iOS each year, eh?

It's not a free, open-source operating system. If people want that, they have ... (drumroll please).... another choice, Android.

iOS has value, and it's unrealistic to think developers get a free ride while paying nothing to Apple.

There is going to be so much effort put into exploiting the alternative app stores and not paying anything to Apple.

Wild Wild West, here we come.

As I've pointed out in other threads, if Apple actually cared about this all apps that make money on iOS would have to pay something. So long as Adobe, Netflix, Amazon, and Spotify (etc...) make millions while using Apple's APIs while paying $0 this argument is just nonsense.

 

[Apple Fan 2008]

Apple punishing developers for EU's insolence.

Apple must have made a mistake! 🤡

You can still use the old agreement.

 

[Mescagnus]

So you're telling me that Apple wants iDOS, a completely free and open-source app denied a place on Apple's App Store, to potentially pay it thousands just to exist.

No. I'm thinking of looking into Android smartphones when I upgrade. I'm just so done with this BS from Apple.

Hasn't this been at the core of the walled garden vs. open ecosystem debacle since the beginning? The market offers options for customers. Don't like Apple? There are many just as good alternatives with Android, for example Samsung S24. Apart from the OS, the S24/S24+ even look just like iPhones.

 

[coolfactor]

Apple punishing developers for EU's insolence.

How is it punishment? It's called "cost of business". At the end of the day, nothing is free.

Freemium apps still generate revenue for their developers.

And they still have a choice to remain on Apple's App Store. No choice is being forced onto them.

 

[bcortens]

Apple apparently does like that accounting, because that's what the charges are for. Just because you have a few greedy developers who want something for nothing doesn't mean that what they want for free isn't valuable. It is entirely unfair to demand Apple or any other company to give away their products for free. I doubt even the EU expects that. Apple has been meeting with EU officials and they have almost certainly already reviewed this plan.

Lets play this out then - All Apps are now entitled to a cut of Apple's iPhone revenue above some sales threshold, lets say for every market share percentage point above 10% Apple has to pay developers a 30% cut. Why? Because without developers the iPhone would struggle to break 10% marketshare.

 

[iOS Geek]

Now this is funny 😂 You wanted this side loading crap and you got it…and everything that comes with it! Zero sympathy. The grass isn’t always greener.

 

[bcortens]

Love it! You wanted this side loading crap and you got it…and everything that comes with it! Zero sympathy. The grass isn’t always greener.

I am hopeful that thanks to existing language within the DMA that the 0.5/install fee will be shot down as a steering measure. Even if it isn't' shot down immediately I cannot see any of the other parties (Spotify, Microsoft, etc...) agreeing with it. I can see them bringing a further complaint to the EU. This is at best a short term win for Apple.

 

[NT1440]

Wait, an EU regulation could kill freemium?

Best news so far today…

 

[iOS Geek]

I am hopeful that thanks to existing language within the DMA that the 0.5/install fee will be shot down as a steering measure. Even if it isn't' shot down immediately I cannot see any of the other parties (Spotify, Microsoft, etc...) agreeing with it. I can see them bringing a further complaint to the EU. This is at best a short term win for Apple.

For some reason, I doubt it. Tim Cook just met with EU leadership, didn’t he? Presumably about this whole mess. It wouldn’t surprise me if discussions of how Apple plans to implement all of this came up (though we can only speculate on that of course).

 

[coolfactor]

Apple also prices the cost of developing these operating systems into the cost of the hardware. The services are supposed to pay for themselves, if they don't then that isn't on these third party developers.

Remember the days when you had to pay $129.00 to get the next major update to OS X?

Apple eventually made the OS "free", but only after "service revenues", not hardware revenues, financed it.

Developers won't be getting a free lunch. They want to play, they need to pay.

Costs are only going *up* for Apple to support this new model. They can't just carry on with a potential major drop in revenue.

 

[NT1440]

I am hopeful that thanks to existing language within the DMA that the 0.5/install fee will be shot down as a steering measure. Even if it isn't' shot down immediately I cannot see any of the other parties (Spotify, Microsoft, etc...) agreeing with it. I can see them bringing a further complaint to the EU. This is at best a short term win for Apple.

That would be laying the precedent that people can just use software developed by others for nothing.

Apple has over 250,000 APIs for developers to use. That represents literally billions of dollars in engineering salaries. Yea *Apple* can afford that, but that creates a huge risk in investing in *new* platforms. The exact opposite that these EU laws are trying to addresss.

What company is going to invest the capital expense in developing SDKs for their products if there’s no ability to offset that cost?

 

[bcortens]

For some reason, I doubt it. Tim Cook just met with EU leadership, didn’t he? Presumably about this whole mess. It wouldn’t surprise me if discussions of how Apple plans to implement all of this came up (though we can only speculate on that of course).

From my understanding of the press reporting that was a fairly small short meeting, not something that would involve a detailed description of Apple's new terms. Aside from that, I can still see MS, Spotify, etc... fighting this fee.