Apple announced today that its changes to the App Store for iOS in the European Union will make their way to iPadOS this fall. This comes after the European Commission designated iPadOS as a gatekeeper platform under the Digital Markets Act (DMA).
The Digital Markets Act requires Apple to implement changes that offer flexibility to end users and developers in the EU, including the freedom to distribute their apps outside the App Store through alternative marketplaces and sideloading apps on the iPhone (and iPad later this year).
Apple charges a Core Technology Fee (CTF) for apps that are distributed outside of the App Store and cross the first million annual installs. For reference, a first annual install is counted when an app is installed for the duration by an EU account in a 12-month period. Currently, developers have to pay a CTF of €0.50 for every first annual install over 1 million in the last 12 months.
God The company claims The core technology fee “reflects the value Apple provides to developers through continued investments in tools, technologies and services that enable them to build and share innovative apps with users.”
The Cupertino giant said in a Blog post that it will start charging CTF for iPadOS apps as soon as the changes are publicly available in the EU. These apps can be downloaded through the app store, web distribution, and alternative marketplaces.
However, developers also have some reassurance from Apple about CTF. He confirmed that users who install the same app on both iOS and iPadOS within a 12-month period will only generate one first annual install for that app instead of two.
Apart from this, Apple has listed two other scenarios where it will not collect the core technology fee in the EU. CTF will not be imposed on app developers such as students, hobbyists and other non-commercial developers who “don’t have any income”.
In other words, they won’t be charged if they create a “non-monetized app that is not tied to revenue of any kind (physical, digital, advertising, or otherwise),” Apple said.
Apple will not collect CTF from small developers with less than €10 million in annual global business revenue. It will offer “a free 3-year upgrade to CTF to help them create innovative apps and rapidly scale their business.”
If a small developer that has not previously crossed the first million annual installs exceeds the threshold within a 3-year period, it will not have to pay the CTF. However, they will have to pay the CTF after the first million annual installations (capped at €1 million per year) if they start earning global revenue between €10 million and €50 million during the 3-year activation period.