Apple Tells EU Free App Developers Worried About Fees to ‘Stay Tuned’

Apple’s plans to charge European Union developers a 0.50 euro Core Technology Fee for apps distributed using the new EU App Store have spurred concerns that the fee might bankrupt any developer that is “lucky” enough to have a free app become popular.

Today, during a workshop about Apple’s Digital Markets Act compliance, Apple’s Vice President of Regulatory Law, Kyle Andeers was asked by iOS developer Riley Testut, known best for his GBA4iOS emulator app, what would happen if a developer ran up millions of dollars in fees under the new rules.

Testut explained that when he was a budding developer still in high school, he released his GBA4iOS app outside of the App Store. The app turned out to be unexpectedly popular, downloaded more than 10 million times. Under Apple’s new rules, the Core Technology Fee for those downloads would have been more than $5 million euros, which would have bankrupted him and his family.

Testut then asked whether Apple would actually try to collect that fee in a similar situation, even though it could financially ruin a family.

Andeers responded that Apple is working on a solution, but does not have the solution ready as yet. He said Apple wants to avoid stifling innovation and not make young developers and their parents afraid to release an app over fears about being forced into bankruptcy.

Andeers told Testut to “stay tuned” for an answer.

To your point, we’ve seen kids everywhere from 8-year-olds, 9-year-olds, 10-year-olds, to teenagers come up with some amazing applications and it’s been one of the great success stories of the App Store. In terms of the Core Technology Fee and our business model, we had to change. The mandates of the DMA forced us to tear apart what we had built and price each component individually. And so we now have a fee associated with technology, tools, and services, we now have a fee associated with distribution and the services we provide through the App Store, and then we have a separate fee for payment processing if a developer wants to use it.

To your point – what is the impact on the dreamer, the kid who is just getting started. It could be a kid, it could be an adult, it could be a grandparent. We want to continue to encourage those sorts of developers. We build a store based on individual entrepreneurs, not so much catering to large corporate interests. And so we really wanted to figure out how do we solve for that.

We haven’t figured out that solution here. I fully appreciate that. We looked at the data. We didn’t see many examples of where you had that viral app or an app just took off that incurred huge costs. That said, I don’t care what the data said. We don’t care what the data said. We want people to continue to feel… and not be scared… some parents… hey, I’ve got four kids who play around with this stuff. I don’t have five million euros to pay. 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.

Apple’s 0.50 euro Core Technology Fee applies both to apps distributed in the official App Store and those distributed through alternative app marketplaces. However, it only affects developers in the EU who choose to take advantage of Apple’s new alternative terms to make their apps available outside of the App Store or reduce the traditional commissions for those sold on the App Store.

The fee must be paid every time an app is installed for the first time, over one million installs, and it’s charged even for entirely free apps that have no in-app purchases or subscriptions. This means an EU app developer could owe Apple money without ever making a single Euro.

While developers can continue to operate under Apple’s current App Store terms instead of opting to work under the new terms, they will be required to pay the same 15–30% commission they have in the past and operate under Apple’s more restrictive rules for the types of apps that can be distributed — rules that prohibit emulator apps like GBA4iOS.

Some see the Core Technology Fee as Apple’s attempt to discourage developers from distributing their apps outside of the App Store and using third-party payment solutions. Developers who adopt any of the new features that Apple has implemented due to the EU’s Digital Markets Act will be required to opt into the updated terms — even if they choose to continue distributing their apps on the App Store.