Apple Working on Solution for EU Core Technology Fee Possibly Bankrupting Apps That Go Unexpectedly Viral

Since Apple announced plans for the 0.50 euro Core Technology Fee that apps distributed using the new EU App Store business terms must pay, there have been ongoing concerns about what that fee might mean for a developer that suddenly has a free app go viral.

App Store vs EU Feature 2
Apple's VP of regulatory law Kyle Andeers today met with developers during a workshop on Apple's Digital Markets Act compliance. iOS developer Riley Testut, best known for Game Boy Advance emulator GBA4iOS, asked what Apple would do if a young developer unwittingly racked up millions in fees.

Testut explained that when he was younger, that exact situation happened to him. Back in 2014 as an 18-year-old high school student, he released GBA4iOS outside of the ‌App Store‌ using an enterprise certificate. The app was unexpectedly downloaded more than 10 million times, and under Apple's new rules with Core Technology Fee, Testut said that would have cost $5 million euros, bankrupting his family. He asked whether Apple would actually collect that fee in a similar situation, charging the high price even though it could financially ruin a family.


In response, Andeers said that Apple is working on figuring out a solution, but has not done so yet. He said Apple does not want to stifle innovation and wants to figure out how to keep young app makers and their parents from feeling scared to release an app. Andeers told Testut to "stay tuned" for an answer.

What we are trying to do is tear apart a model that has been integrated for 15 years. And so for 15 years, the way we've monetized everything was through the commission. It covered everything from technology to distribution to payment processing, and the beauty of that model is that it allowed developers to take risks. Apple only got paid if the developer got paid, and that was an incredible engine for innovation over the last 15 years. We've seen it go from 500 apps to more than 1.5 million.

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.

It is not clear when Apple might come up with a solution or what that solution might be, but it sounds like the company might soon have some kind of option for these rare fringe cases when an app goes unexpectedly viral.

The 0.50 euro Core Technology Fee (CTF) that Apple is charging applies to all apps created under Apple's new business terms, both those distributed in the ‌App Store‌ and those distributed outside of the ‌App Store‌ in the European Union. The CTF must be paid for every "first" app install over one million installs.

A free app that is distributed outside of the ‌App Store‌ and downloaded over a million times will owe 0.50 euros for every subsequent "first" install, aka the first time a customer downloads an app on a device each year. The fee is incurred whether or not an app charges, creating a situation where an app developer could owe Apple money without ever making a dime.

As it stands, the CTF is a major unknown for any kind of freemium or free app built under the new business terms that might go viral, effectively making it very risky to develop a free or freemium app outside of the ‌App Store‌. A free or freemium app that gets two million annual "first installs" would need to pay an estimated $45,290 in fees per month, or more than half a million dollars per year, even with no money earned. That's not a sustainable model for free apps, and freemium apps would need to earn at least 0.50 euros per user to break even.

App developers are able to continue to use Apple's current ‌App Store‌ business terms instead of adopting the new terms, paying just 15 to 30 percent commission to Apple with no change. That prevents distribution outside of the ‌App Store‌, and it prevents developers from using third-party alternative payment solutions in the ‌App Store‌. Adopting any of the new features that Apple has implemented because of the Digital Markets Act requires opting in to the updated business terms.

Apple has been tweaking the app ecosystem rules that it introduced in the European Union based on developer feedback. Developers can now opt back in to the current App Store rules after trying out the new rules, though this is only available one time. Apple also recently did away with an app marketplace restriction that required alternative marketplaces to offer apps from any third-party developer that wanted to participate.

Third-party app stores are now able to offer apps only from their own catalog, and developers will soon be able to distribute apps directly from their websites as long as they meet Apple's requirements. Note that all of these changes are limited to the European Union, and the ‌App Store‌ is operating as before in the United States and other countries.

Popular Stories

iPadOS 26 App Windowing

Apple Explains Why iPads Don't Just Run macOS

Friday June 13, 2025 7:46 am PDT by
iPadOS 26 allows iPads to function much more like Macs, with a new app windowing system, a swipe-down menu bar at the top of the screen, and more. However, Apple has stopped short of allowing iPads to run macOS, and it has now explained why. In an interview this week with Swiss tech journalist Rafael Zeier, Apple's software engineering chief Craig Federighi said that iPadOS 26's new Mac-like ...
iphone 16 pro models 1

17 Reasons to Wait for the iPhone 17

Thursday June 12, 2025 8:58 am PDT by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models simultaneously, which is why we often get rumored features months ahead of launch. The iPhone 17 series is no different, and we already have a good idea of what to expect from Apple's 2025 smartphone lineup. If you skipped the iPhone...
Logitech Logo Feature

Logitech Announces Two New Accessories for WWDC

Friday June 13, 2025 7:22 am PDT by
Alongside WWDC this week, Logitech announced notable new accessories for the iPad and Apple Vision Pro. The Logitech Muse is a spatially-tracked stylus developed for use with the Apple Vision Pro. Introduced during the WWDC 2025 keynote address, Muse is intended to support the next generation of spatial computing workflows enabled by visionOS 26. The device incorporates six degrees of...
iOS 26 Screens

Here Are All the iOS 26 Features That Require iPhone 15 Pro or Newer

Thursday June 12, 2025 4:53 am PDT by
With iOS 26, Apple has introduced some major changes to the iPhone experience, headlined by the new Liquid Glass redesign that's available across all compatible devices. However, several of the update's features are exclusive to iPhone 15 Pro and iPhone 16 models, since they rely on Apple Intelligence. The following features are powered by on-device large language models and machine...
CarPlay Liquid Glass Dark

Apple to Let iPhone Users Watch Videos on CarPlay Screen While Parked

Thursday June 12, 2025 6:16 am PDT by
Apple this week announced that iPhone users will soon be able to watch videos right on the CarPlay screen in supported vehicles. iPhone users will be able to wirelessly stream videos to the CarPlay screen using AirPlay, according to Apple. For safety reasons, video playback will only be available when the vehicle is parked, to prevent distracted driving. The connected iPhone will be able to...
iOS 26 on Three iPhones

Hate iOS 26's Liquid Glass Design? Here's How to Tone It Down

Wednesday June 11, 2025 4:22 pm PDT by
iOS 26 features a whole new design material that Apple calls Liquid Glass, with a focus on transparency that lets the content on your display shine through the controls. If you're not a fan of the look, or are having trouble with readability, there is a step that you can take to make things more opaque without entirely losing out on the new look. Apple has multiple Accessibility options that ...
Mac Studio Feature

Apple Begins Selling Refurbished Mac Studio With M4 Max and M3 Ultra Chips at a Discount

Thursday June 12, 2025 10:14 am PDT by
Apple today added Mac Studio models with M4 Max and M3 Ultra chips to its online certified refurbished store in the United States, Canada, Japan, Singapore, and many European countries, for the first time since they were released in March. As usual for refurbished Macs, prices are discounted by approximately 15% compared to the equivalent new models on Apple's online store. Note that Apple's ...
iOS 26 Feature

Apple Seeds Revised iOS 26 Developer Beta to Fix Battery Issue

Friday June 13, 2025 10:15 am PDT by
Apple today provided developers with a revised version of the first iOS 26 beta for testing purposes. The update is only available for the iPhone 15 and iPhone 16 models, so if you're running iOS 26 on an iPhone 14 or earlier, you won't see the revised beta. Registered developers can download the new beta software through the Settings app on each device. The revised beta addresses an...
maxresdefault

Everything Apple Announced at WWDC 2025 in 10 Minutes

Monday June 9, 2025 5:21 pm PDT by
At today's WWDC 2025 keynote event, Apple unveiled a new design that will inform the next decade of iOS, iPadOS, and macOS development, so needless to say, it was a busy day. Apple also unveiled a ton of new features for the iPhone, an overhauled Spotlight interface for the Mac, and a ton of updates that make the iPad more like a Mac than ever before. Subscribe to the MacRumors YouTube channel ...

Top Rated Comments

9059737 Avatar
16 months ago
The only acceptable solution is to completely remove this anti-competitive junk fee.
Score: 74 Votes (Like | Disagree)
User 6502 Avatar
16 months ago

So you think Apple should just allow everyone to distribute their apps on the App Store for free?
You seem to fail to understand that this fee is applied to apps that are NOT on the App Store and to developers who chose to NOT use the App Store. So yeah, Apple should NOT charge them any fee, other than the developer fee of $99 per year they already pay and that is meant to cover the cost of using Xcode and the APIs.
Score: 52 Votes (Like | Disagree)
Mrkevinfinnerty Avatar
16 months ago
So generous of them. Apple is the peoples monopolist.
Score: 30 Votes (Like | Disagree)
till Avatar
16 months ago
I honestly take this as a sign that they know regulators won't accept the CTF, because it's incredibly late in the game to not have an answer to such an obvious question.
Score: 28 Votes (Like | Disagree)
AppleTO Avatar
16 months ago

One possible solution is to get rid of free apps. They were necessary in the beginning, so Apple could build its catalog of apps on the AppStore, but they just devalue people's work.
Would you pay to download your banking apps, food delivery apps, Amazon, Google Maps, YouTube?
Score: 26 Votes (Like | Disagree)
AppleTO Avatar
16 months ago

The only acceptable solution is to completely remove this anti-competitive junk fee.
No, it's not. Apple is not required to give a free all access pass to their platform. It costs money to develop a platform and SDKs.
Score: 23 Votes (Like | Disagree)