Key Takeaways
1. Apple has created a Core Technology Commission (CTC) that takes 5% of sales for digital products promoted via Web Distribution.
2. The CTC will be in addition to an existing Core Technology Fee (CTF) of €0.50 per app download for popular apps.
3. Apple plans to reduce its commission rates to 17% for most developers and 10% for qualifying small businesses and subscription apps during their first year.
4. Apple claims only “less than 1%” of developers will pay the CTF, with exemptions for certain organizations like educational and non-profit entities.
5. Tim Sweeney criticized Apple’s new fees as “malicious compliance” with the DMA, claiming they limit developers’ payment options and profitability.
Apple has recently announced its latest strategies to dodge the hefty €500 million (~$585 million) penalty imposed by the European Commission due to its breach of the Digital Market Act (DMA).
New Core Technology Commission
The new plans from the tech giant involve setting up a Core Technology Commission (CTC). This commission will take 5% of the selling price for all digital products or services that are promoted and available through Web Distribution. This new method allows developers to guide customers to pay for apps outside the App Store.
Additional Fees and Commissions
The CTC will be applied on top of Apple’s existing Core Technology Fee (CTF), which is a fixed charge of €0.50 (~$0.59) for each app download from those with over 1 million installs per year.
In an effort to encourage developers to keep their apps and payments within Apple’s iOS and iPadOS Store in the EU, the company plans to lower its well-known commission rates to 17%. For developers who qualify for the App Store Small Business Program or those who offer subscription-based apps, the rate will drop to 10%, but only during the first year of operation.
Developer Concerns
Apple claims that “less than 1%” of those affected by the new charges will actually pay the CTF. Moreover, there are several exemptions, such as app developers working with educational institutions, government bodies, or non-profit organizations, who will not be subject to the fee.
However, Tim Sweeney has taken to X to criticize Apple’s new conditions, labeling them as “malicious compliance” with the DMA, which he argues does not meet the company’s legal responsibilities in either the EU or the US.
The executive also claims that Apple’s updated policies restrict developers’ options for offering different payment methods, making it hard for them to earn profits on the App Store.
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