How Apple chose to comply with the European Union’s new Digital Markets Act (DMA) has come under scrutiny from many sides since it took effect earlier this month, but the company has since continued to adapt its new rules. Now it appears Apple is considering more changes, this time to the way the underlying technology fee works.
The core technology fee is a €0.50 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 a fee to be paid after the initial 1,000,000 downloads, which might sound like a lot. But it’s the fee that has caused a lot of concern among developers. Mainly because of how it will work for apps that are distributed for free.
As the developers have already pointed out, a free app that goes viral through social media can easily get downloaded over a million times. And if downloads keep coming, developers would be on the hook for €0.50 per download after that point. Those numbers add up quickly, especially when your app is free. It’s something Apple is now aware of, and the DMA Compliance Workshop said developers should “stay tuned” for changes that will hopefully alleviate concerns.
The workshop was attended by developers as well as Apple’s VP of Regulatory Law Kyle Andeers with developer Steve Troughton-Smith sharing a video of the proceedings on Mastodon. Developer Riley Testut of the Game Boy Advance emulator GBA4iOS asked Andeers about the underlying technology fee, suggesting that young developers could find themselves in trouble if things stay the way they are.
Using GBA4iOS as an example, Testut pointed to the fact that the app had been downloaded more than 10 million times and that if that had happened under Apple’s terms of the underlying technology fee, his family would have been on the hook for five million euros — a figure that would have put them to bankruptcy. The insinuation was that a fee for the underlying technology could have a chilling effect on app development, preventing developers – especially young ones – from experimenting. That, Andeers says, is not what Apple wants.
You can watch the full exchange in the Mastodon post linked above, but the key is Apple’s stance on ensuring that developers are able to make free apps available without fear of bankruptcy. Andeers notes that the lack of commission from apps sold through third-party app stores is why the underlying technology fee was introduced, noting that it was imposed on Apple by the DMA.
Andeers acknowledged that Apple hasn’t yet “found that solution” in terms of how it can build a structure that doesn’t affect individual developers without “satisfying big corporate interests.” Andeers says that Apple “looked at the data” when designing the fee for the underlying technology, admitting that he “didn’t see many examples where you had that viral app or an app that just took off that caused huge costs.”
Andeers concluded by saying, “This is something we have to figure out, and it’s something we’re working on. So I’d say stay with us on that.”
It’s unclear when we can expect Apple to prepare its updated core technology fee, and it seems unlikely that it will be phased out entirely. But anything that ensures developers can continue to release apps without fear of it ruining them financially has to be a positive for Apple and iPhone users.