Apple announced today that its App Store changes 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 offering flexibility to end users and developers in the EU, including the freedom to distribute their apps outside of the App Store through alternative marketplaces and sideloading apps on iPhone (and iPad later this year).
Apple charges a Core Technology Fee (CTF) for apps that are distributed outside of the App Store and have crossed one million first annual installs. For reference, a first annual install is counted when an app is installed for the time by an account in the EU in a 12-month period. As of now, developers need to pay a CTF of €0.50 for each first annual install over one million in the past 12 months.
The company argues that the Core Technology Fee "reflects the value Apple provides developers through ongoing investments in the 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 once the changes become publicly available in the EU. These apps may be downloaded through the App Store, Web Distribution, and alternative marketplaces.
With that said, developers also have some relaxation from Apple regarding CTF. It 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 that, Apple detailed two additional scenarios where it won"t charge the Core Technology Fee in the EU. CTF will not be levied on app developers such as students, hobbyists, and other non-commercial developers who have "no revenue whatsoever."
In other words, they won"t be charged if they create an "app without monetization that is not related to revenue of any kind (physical, digital, advertising, or otherwise)," Apple said.
Apple won"t charge CTF from small developers with less than €10 million in global annual business revenue. It will offer a "3-year free on-ramp to the CTF to help them create innovative apps and rapidly grow their business."
If a small developer who hasn"t crossed one million first annual installs in the past exceeds the threshold within the 3-year period, they won"t have to pay the CTF. However, they"ll have to pay the CTF after one million first annual installs (capped at €1 million per year) if they start earning a global revenue between €10 million and €50 million within the 3-year on-ramp period.