EU App Store Tiers and Core Technology Commission
Apple (Hacker News, MacRumors, MacStories, 9to5Mac, AppleInsider, ArsTechnica):
Today, we’re introducing updated terms that let developers with apps in the European Union storefronts of the App Store communicate and promote offers for purchase of digital goods or services available at a destination of their choice. The destination can be a website, alternative app marketplace, or another app, and can be accessed outside the app or within the app via a web view or native experience.
App Store apps that communicate and promote offers for digital goods or services will be subject to new business terms for those transactions — an initial acquisition fee, store services fee, and for apps on the StoreKit External Purchase Link Entitlement (EU) Addendum, the Core Technology Commission (CTC). The CTC reflects value Apple provides developers through ongoing investments in the tools, technologies, and services that enable them to build and share innovative apps with users.
[…]
By January 1, 2026, Apple plans to move to a single business model in the EU for all developers. Under this single business model, Apple will transition from the Core Technology Fee (CTF) to the CTC on digital goods or services. The CTC will apply to digital goods or services sold by apps distributed from the App Store, Web Distribution, and/or alternative marketplaces.
I find this really confusing, but I think when they say “single business model” they mean unifying the CTF and the CTC and the previous “alternative” terms for apps that are not using the traditional App Store model. There are still two models in that you can do the simple flat rate that’s the same throughout the world or the complicated and ever-changing EU model that supposedly satisfies the DMA.
By default, apps on the App Store are provided Store Services Tier 2, the complete suite of all capabilities designed to maximize visibility, engagement, growth, and operational efficiency. Developers with apps on the App Store in the EU that communicate and promote offers for digital goods and services can choose to move their apps to only use Store Services Tier 1 and pay a reduced store services fee.
They are being petty and saying that if you don’t pay for Tier 2, customers have to manually update your app, yet developers are forbidden from making their own auto-update system.
At this point, it’s unclear what exactly is meant by “Exact match”. […] What I found striking about the search differences between Tier 1 and Tier 2 is that in creating this distinction, Apple clearly considers App Store search to be a developer feature rather than a user feature. In other words, the user’s interest in finding an app via search is disregarded, and Apple is willing to be less helpful to users to the extent that app developers pay a lesser commission to Apple. A common talking point in defense of Apple’s App Store lockdown on iOS is that the App Store is supposed to be for the benefit of users rather than developers. Apple’s new policies give the lie to that notion.
If you agree to the Alternative Terms Addendum for Apps in the EU, your developer account will be assigned the StoreKit External Purchase Link Entitlement to enable the communication and promotion of offers. The agreement allows for two ways to offer digital goods or services for sale, and includes new business terms.
You can do the alternative terms with IAP for a reduced commission (vs. the rest of the world) or with external links/purchases (but then you have to pay the initial acquisition fee and the store services fee).
You can choose to use the App Store’s In‑App Purchase system or use options to communicate and promote offers for digital goods or services per EU storefront and per-app, which you can update by changing the entitlement election in Xcode by updating the property list key with a new app submission.
I think this is Apple’s way of saying that you can no longer give the user the choice of IAP vs. external purchase within the same app.
I’m pretty sure EU said CTF is not compliant, and the CTC won’t be compliant.
To me it seems like changes in framing and at the margins, rather than really addressing the core issues.
Apple always disagrees and always appeals, but these are pretty big changes. The introduction of a lower App Store tier with lower fees (but more spite?), combined with the reduced rates to the regular App Store fee structure, is especially fascinating. One has to wonder if Apple would’ve had as much trouble in the EU if it had made changes like this much sooner, but here we are.
Apple’s new EU App Store rules make my head hurt. Which is probably the point.
I wonder how many developers have seen all this churn and concluded that it’s better to just spend their time on Web apps.
I was a very motivated developer for Apple platforms in the past, but Apple’s handling of its monopoly and it’s “compliance” with the DMA are now making me take a serious look at Linux and Android.
Will Apple’s new EU fee structure pass this time?
It all boils down to: can an app trying to compete with an Apple app offer the same level of pricing that Apple has.
And the answer is, still, no. Apple still maintains the unfair advantage in both discoverability and in pricing, so by definition their proposal does not satisfy the DMA. It might reduce their rate from 30% to 12%, if you eschew App Store discoverability, but that’s still 12% more than any Apple app has to pay or needs to charge.
Apple’s distribution options will only be DMA compliant if and when e.g. a third party music app can match or undercut Apple Music’s pricing without wiping out its own profit margin.
Apple’s new terms might not be the colossal ‘fuck you’ the Core Technology Fee was to developers, but they amount to keeping the status quo, not truly enabling competition or following the law.
Previously:
- Critical Warning for External Purchases in App Store
- Court Orders Apple to Comply With Anti-Steering Injunction
- EU Fines Apple and Meta Over DMA Violations
- DMA Compliance Workshop: Notarization and Core Technology Fee
- DMA Compliance: Alternative App Stores But No Sideloading
Update (2025-07-04): Marcus Mendes:
In a post on X, Sweeney said Apple’s latest DMA update is “blatantly unlawful in both Europe and the United States,” calling it a “malicious compliance scheme” that “makes a mockery of fair competition.”
Apps with competing payments are not only taxed but commercially crippled in the App Store.
Apple blocks auto-updates to these apps, cripples search for them, and blocks customer support and family sharing, and otherwise ensures that using these apps will be an intentionally-miserable experience for users and a commercial failure for developers.
Apparently I’m paying a certain percentage of the Apple commission to be included in search. Can I opt out of just that?
Zero developer friends can figure out what normal app commissions will be. None. 😞
i think that’s the point
These changes are quite hard to parse and understand, so we read them for you so you can decide whether or not to take action.
What’s most crazy is devs think the normal fee got lowered from 30% to 20% (in EU) but no one is saying it publicly.
- we aren’t even sure
- high doubt they’d do it
- there’s so little goodwill left
I booked a lab to ask questions. 🤷♂️
Amongst other policy and API changes, Apple also announced a new, seemingly simplified, experience on iOS/iPadOS for installing apps and alternative app marketplaces in the EU.
[…]
The new fee structure is undeniably convoluted, and I think downright confusing.
[…]
One consequence of the €0.50 per-download Core Technology Fee (CTF) being replaced by a 5% Core Technology Commission (CTC) is that there will no longer be a penalty for small developers who have a free-to-download app that hits over one million EU downloads. That was a legitimate problem with the CTF — an app with 5 million EU downloads would owe Apple €2 million for the CTF, but might be generating far less than that (or even nothing at all) in revenue. But another consequence of switching to the CTC from the CTF is that super-popular apps from super-big companies that don’t sell digital goods from their apps will continue to pay nothing at all. E.g. unless Meta starts selling digital goods from within their apps, they’ll continue to pay nothing at all to Apple for zillion-download apps like Instagram, Facebook, and WhatsApp. That was a shortcoming with the App Store’s model that the CTF was designed to correct.
But perhaps users may ultimately come out on top if App Store search is kneecapped. Perhaps Apple’s proposals will encourage more third-party app marketplaces, giving Apple competition for reaching users on its platform. Then, perhaps, the company would find reasons to loosen its reins and change its relationship with developers without being compelled by courts or regulators.
Or maybe Apple will preload Android onto its E.U.-bound iPhones. Seems similarly likely.
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Is it just me or is this intentionally baffling? Surely there is a better way than this simple 37 step plan.
Even the excerpted quotes are long. No one seems to be able to explain succinctly what Apple actually wants in any given situation.
Governing bodies should stop giving multi-billion transnationals the benefit of the doubt. All they do is draw things out with word games and malicious compliance.
Start with a €1 million daily fine, double it daily.
By day 9 or 10 Apple will either rush compliance or give up the market. Their choice.
Apple is Microsoft without an AI or Cloud Strategy.
@bart Of course there is a "better" way; the personal computer way. But where is the $$$ to line up Tim Cook's pockets with that way?
@bst... what's so baffling? A 37 step plan? Or tiers? We all know what Apple "wants". Profits. They are learning from out current president.... first, deny. Second, claim falsehoods. Third, simply do what you think is "right". Or to put it in terms of the subject....
First deny by appealing. Then, make it look like you are complying but make sure it's complicated. (That's the 37 step plan.) . Finally, just keep earning profits. (Until? I have bo clue.) The problem is we all are only in part 2... the 37 step plan.
Time for the EU to simply read the riot act and simply ban Apple from applying any form of differential fees to users of non-Apple sales channels, ban any form of revenue from non-Apple sales channels, and threaten a ban for non-compliance on Apple conducting any software retail activities (requiring independent software vendors), including for their own apps, within the EU.
Apple needs to admit defeat gracefully and make the EU changes worldwide. In exchange the EU needs to relax certain rules that make Apple leery of implementing things like iPhone mirroring.
Both sides need to look at bigger picture and create a win-win scenario.
If Apple drags it feet further then developers will remember this and flock away from Apple with amazing haste as soon as someone else makes a platform for reaching customers at scale. Price is not the only reason that Vision Pro has had poor sales. Apple is playing with fire here.
The EU is also overzealous about its rules and the last time it was so we got meaningless cookie acceptance boxes on every website in earth. Estimates are that mobile software market earned ~ $250 billion in 2023, while Apple made ~ 9 billion USD from the App Store in 2023. Assuming Apple’s share of the earnings was around $100 Billion, that works out to Apple taking 9% commission. Not unreasonable.
Apple needs to stop playing the role of big bad wolf that the EU has cast it in. Instead the two of them need to talk holistically about how the market needs to change so that everyone can earn more money while respecting privacy and security.
This is basically what I predicted would happen.
So for EU folks not satisfied with the current 15%-for-children/30%-for-adults-all-you-can-eat-but-you-can’t-take-food-home dining option… (I think that’s not going away, right? It wasn’t totally clear to me)
Well, now here’s the Ala Carte menu… Pick the items you want, but you get only what you pay for… and you can take-away your order as well (that is, use your own payment system) but there’s a fee for the take-away containers (if I want to mangle a metaphor)
This really was the likely outcome.
Does this mean that the 15/30% option is now the premium/easy option? And the ala carte menu is the ‘basic economy airplane seat’ equivalent where you have to pay for your carry-on and beverages?
I don’t love it, but seems like that’s what some folks were asking for. And no complaints above about the fee percentages (except for wanting it to be zero), so I guess that’s a start.
I also suspect this structure will be rolled out in the USA if the current anti-anti-steering 0% commission/fee loophole isn’t closed soon, and as a template, as needed, throughout the world.
I also found these interesting:
• What Apple provides and charges for is more explicit, right? Marketing… ratings, reviews, replies… I didn’t quite think of those as marketing but actually yeah, that’s marketing. I read reviews before buying something online. No reviews = no purchase for me.
• I’m curious how updates will work when they’re not automatic.
• Selling something linked from an app on the app store? That’s a referral fee, just like any other business, and already done in some countries, so made sense it’d be here as well. Another way to look at this: You get a discount from Apple if you *don’t* link out.
Finally, I’m curious about what a company like Epic will pay if they want the same presence and update support for Fortnite (big bi-weekly updates is their whole thing, I believe) on the app store. Guessing it’s 27%.
Gruber 1: "The new fee structure is undeniably convoluted (...) It’s a natural consequence that an overly complicated law (the DMA) has resulted in an ever-more-complicated set of guidelines and policies (from Apple)."
Gruber 2: "That seems largely by design from Apple" "I don’t think Tier 1 is intended to be a feasible choice for any mainstream apps or games. The whole thing is just a way to justify that 8 percent of the commission developers pay is justified by various features of the App Store itself."
So this crazy solution is both a natural consequence of the DMA, but also mainly by design from Apple, and partly made just to convince people that Apple's previous approach was justified.
@Someone... no. In two ways...
-- First, I absolutely refuse to be called part of "the children". I'm a now-retired adult who *prefers* to say I'm part of the 15%. That - while I understand the metaphor - is not just condescending to me, it's rude.
-- Second, to use a *much* more accurate metaphor, consider a company in a different market. Let's say the company makes... clothing. And need to not just (1) employ people to make them - please, don't offend me again and think you know where I'm headed, it's not tariffs - but also (2) get them to market, and (3) actually sell them. Sure, you can do this on your own (it's called home-grown if you will) but if you want to earn a living? Offer your wares for sale where consumers actually shop? Say Walmart? Or - to use names no longer around - Sears, Kmart, JC Penny's?
My point is this: Wrong analogy. Apole's App Store deserves *something*. Maybe not 15%. Definitely not 30%. (IMHO.) But something. They *are* greedy *and* making enemies both legal and "supplier" (think: developers). But they *do* deserve more than US$100 annual for a small developer to have a presence in their monopolistic store. Yep, it's complicated....
@Dave @SomeoneElse is a different Someone ;)
Apple's app store deserves a commission at what ever level Apple chooses to charge (Amazon used to charge 75% for eBook sellers), on the proviso that they get no revenue at all for any sale that doesn't occur on non-Apple channels, and they have no coercive power to compel developers to use their channel.
If Apple wants to charge a "technology fee" to developers, then it would be a standard regulatory requirement that they have to charge that same fee to all developers, regardless of their sales channel, and without cross-subsidies to their own storefront, otherwise it would be a textbook example of using a monopoly over one service (the provision of technology) to distort the competitive landscape for another service (digital storefronts).
Anyone wishing to argue that "Apple made the market so devs should pay them in gratitude" can be directed to "there's an app for that" the entire marketing strategy that built the iPhone was the fact it had 3rd party developers. So, 15-30% of all Apple iPhone revenue should have been escrowed to a fund, and distributed to developers (as is done by copyright collection agencies), because they made the market for the iPhone.
It's really a very simple situation that the Grubers of the world would like to pretend is complicated.
Um, at second @someone? :-) Some here leave names, some don't. Hope we both understand. Excellent points:
> and they have no coercive power to compel developers to use their channel... then it would be a standard regulatory requirement that they have to charge that same fee to all developers...If Apple wants to charge a "technology fee" to developers, then it would be a standard regulatory requirement that they have to charge that same fee to all developers, regardless of their sales channel, and without cross-subsidies to their own storefront.
I *think* I agree with you, but let' make sure on this. (First, I hope I noted your opinion correctly and didn't take anything out of context.) Does a person like me (sales under US$300 annuall) pay the same rate as Epic (for example) or Microsoft to Apple? I *am* grateful that I can sell what I make as a hobby there. (And gladly take the 15
@Dave *lol* I'm the usual @Someone on here (and both previous posts in this thread) ;)
I think Apple should be able to set whatever rules they like on their store, but they shouldn't be able to compel you to sell in their store in order to sell apps to run on Apple-branded devices. Nor should they be able to charge you a different price for the same service as compared to a larger, or smaller vendor.
So a developer account should cost the same regardless of whether you're a hobbyist or Microsoft. Arguably, a developer account shouldn't be necessary for a person to make software for a device they own, but as a sculptor I pay hundreds of dollars a year for my public liability insurance, so I accept some trades have costs you just have to pay, irrespective of whether you're "profitable" doing them.
Eentually Apple is going to have to behave as if it is a bunch of structurally separated, unconnected companies with regards to the development and retailing chain for third party software, or else regulators are going to actually struturally separate them.
And to clarify - sure Apple should be able to offer a sliding scale of revenue cuts on their store, depending on how big the developer is, but only in the context that developers are free to go to a different store, or self host their own sales channel.
Basically, the way the Mac works now.
@Dave, I’m a ‘child’ in this metaphor, too! :) I’m just talking about size and scale of the business and profits, of course.
That Apple gives me the same tools/food as the ‘adults’ in my tortured metaphor (and not a limited menu of chicken fingers or butter pasta)… is a pretty great, IMO.
The lack of service tiers and simplicity is/was elegant and terrific in comparison to these new options… for me.
Maybe not for the Epics and Spotifys of the world, so I’m looking forward to seeing how they gripe about this new structure.
I think Tier 1 is a boon for a certain kind of spam app that occasionally makes it through Apple’s review process. It can only come up in search with an exact match, so it’s harder for the dev to find and report, but can still sit very close to an app’s name at a common typo without setting off alarms. Yet this doesn’t prevent linking directly to the page like in an advertising campaign. And then, ratings and reviews are disabled, so users can’t even warn each other about how the app is a scam.
@modulusshift Yeah, this goes with Jeff Johnson’s point. Apple is acting like ratings/reviews are a developer feature, but I see them as more about protecting users, so it’s a shame that Apple is holding them back. It will be interesting to see whether the norm becomes that users don’t trust Tier 1 apps at all or whether they don’t notice the difference.
"I wonder how many developers have seen all this churn and concluded that it’s better to just spend their time on Web apps."
🙋🏻♂️
It’s very revealing to me that they’re willing to degrade customer’s experience and even possibly security just to be petty
App Store reviews aren’t a benefit for the developer, they’re a benefit for the user
Same thing with automatic updates
Apple has just completely lost it
Apple just pinching pennies and being ridiculous. I’ll gladly give 50% if you actually do some marketing and sell some units but you don’t. I do all my marketing and you just take.
“Daddy Trump” will happily intervene and put a stop to the EU fines, but he wants a political win in return (manufacturing in America). Tim Cook doesn’t know whether to take a shit or eat a banana
"I think this is Apple’s way of saying that you can no longer give the user the choice of IAP vs. external purchase within the same app."
Right.
The DMA demands that Apple gives app developers the choice of "Alternative Payment Services" (APS) for the European Economic Area (EEA).
Since every iPhone user who ever bought something on the AppStore has either signed up for some payment method in their Apple Account or used gift cards, 100% of existing customers for in-app-purchases did use "Apple payments" (not to confuse with "Apple Pay").
The choice granted by the DMA is no choice at all if it means you are losing your existing customers, because you are not allowed to offer Apple Payments anymore when you choose an APS.
Since no developer can afford to not offer Apple Payments and drive their customers away, APS have no chance at all to enter the market of in-app-purchases in the EEA. That might work in Africa where way more people use MPESA than signed up for Apple Payments - but the DMA is for Europe.
Imagine if VISA (the market leader in credit cards) stipulated that merchants could not offer their customers any other payment method if they wanted to offer VISA card acceptance - the EU would never allow this clear abuse of monopoly.
So why should they allow Apple to do the same?
