Apple will introduce a new "Core Technology Fee" across the EU, charging developers who want to use third-party storefronts €0.50 ($0.53) above a threshold of 1 million first installs per year. In the case of the App Store, the EU's DMA legislation means Apple must allow developers to leverage payment services and marketplaces outside of its end-to-end platform.
The bill aims to prevent digital platforms deemed to be "gatekeepers" from prohibiting users from interacting with third parties. For example, Epic now plans to bring Fortnite back to iOS in Europe via its own Epic Games Store.
However, this is also a trap for AppStore developers hoping to do business in Europe. In order to take advantage of the new features and terms, Apple requires developers to agree to new business terms.
The terms include a new fee called the Core Technology Fee (CTF), which Apple says will only apply to developers who "achieve exceptional scale on the iOS platform in the EU." In practice, this means any developer with more than 1 million installs per year.
Developers can choose to avoid the fee by continuing to use Apple's existing terms, but that means they will give up the option of publishing iOS apps on other app markets or using another payment provider.
For those wondering how much the CTF will cost developers who find success in Europe, Apple has provided a handy calculator to show how it might scale (and how much it could save by sticking with the company's existing terms).
According to the calculator, if a free app reaches 2 million downloads in the EU under the new terms, they will be paying Apple more than $45,000 per month due to the CTF. This fee is the same whether those downloads are made through the App Store alone, through another storefront, or through a combination of the two.
However, if developers achieve exactly the same results under Apple's existing terms, they won't need to pay any additional fees.
The fees paid by large-scale application developers will become more substantial. If the free app is downloaded 5 million times, the monthly cost will exceed $180,000. 10 million downloads means more than $400,000 per month. You can see how this will snowball, especially when you start considering other factors, such as fees paid to alternative suppliers.
Some developers say that CFT is very similar to the controversial runtime fee (RuntimeFee) launched by Unity last year. The initial version of this initiative would charge developers a fee per installation, with the fee higher or lower depending on the number of installations. After a huge backlash, the game engine maker ended up going back to the drawing board.
Nikita Bier, the creator of Discord's social application Gas, said in response to the news that CFT may cause some developers to become dependent on Apple.
"Under the App Store's new fee structure in Europe, if sales hit $10 million, Apple's annual share is $6.2 million. Assuming you have no operating costs or wages, your revenue is $2 million after tax, or 20% of sales: $2 million after tax, or 20% of sales," he wrote on X, sharing a screenshot of his fee calculations. "So I would never launch an app in Europe. If the revenue per user is less than $0.57 - which is the case for most apps - then your revenue will end up being negative and you will owe Apple money."
Mike Desaro, founder of mobile studio Prime31, questioned whether Apple borrowed Unity's gameplay. "Did Apple just learn from Unity? What happened in the gaming industry? Imagine that a few months later you use Unity6 (stupid move 1), and you are charged twice for each installation. Plus the core technology fee. What a year it will be!" he wrote.
Epic Games boss Tim Sweeney seems to agree with this assessment, saying an emphatic "yes" in response to an X post asking if Apple had just introduced the same runtime installation fees as Unity. He also shared a lengthy post of his, describing Apple's new terms as an "illegal anti-competitive scheme rife with arbitrary fees."
Of course, Sweeney has a long history of feud with Apple. In 2020, Apple removed "Fortnite" from the App Store because it violated regulations by using third-party payment. After that, Epic and Apple successively went to court.
Apple claims that the new EU guidelines will allow more than 99% of developers to reduce or maintain existing fees. As we explained before, CFT is optional for developers in the EU, but only if they have no interest in exploring options outside of the AppStore ecosystem. For developers keen to explore new frontiers, success may come at a cost.