First CTF adjustment: Apple weakens unfair developer fees

With the opening of the app market on the iPhone, Apple introduced a few rules for developers. These are basically intended to ensure that the in-house app store is viewed and preferred as the lesser evil. One measure from the catalog of rules, for example, was the payment of the “Core Technology Fee” (CTF), a fee which corresponds to a levy of 1 euros per download from 0,50 million annual new app installations. Hobby developers and people who offer their apps for free in particular would go bankrupt if they became viral. Apple now sees this and is adjusting the fees.

Apple is adjusting the Core Technology Fee (CTF): Anyone who offers a free app via sideloading or generates revenue with the software in the first three years will be spared. The system is still not perfect.
Apple is adjusting the Core Technology Fee (CTF): Anyone who offers a free app via sideloading or generates revenue with the software in the first three years will be spared. The system is still not perfect.

Apple Core Technology Fee: No fees for free apps

Instead of a fixed fee of 50 cents per download, Apple has now introduced a staggered fee payment. This ensures that hobby developers, new software companies and established studios with free apps do not have to pay any fees. Not even if your app goes viral and annual new installations break the million mark. The fees to be paid for paid apps are also staggered according to global revenue, so that you don't tend to have to pay the full 50 cents per download.

Three-year grace period for successful, paid offers

If small developers, new studios or others suddenly celebrate great success with their payment app, they will no longer be directly excluded from Apple. A transition period of three years should also ensure this. This applies once you agree to the new App Store rules, which must be agreed to in the EU if you want to offer your own software outside of the Apple cosmos. It counts towards the new core technology fee scale. Overall, the new CTF regulations can be summarized as follows:

  • Free apps, NGO, educational and government offerings: No CTF, not even with millions of downloads
  • Revenues under 10 million euros: No CTF in the first three years after approval of the new App Store rules
  • Revenues of 10 and 50 million euros: CTF must be paid, but is limited to 1 million euros per year during the three-year grace period
  • Income of over 50 million euros: No special treatment, the CTF must be paid in full without an interim period
  • After the three-year period: If income is generated, the CTF counts as usual at 50 cents per download after the first million annual new installations

Updated developer information on Apple's CTF: Have a look here.

A step in the right direction, but not yet good enough

In order to be able to program for Apple systems and then actually bring the apps to the end devices, you need a membership in the Apple Developer Program. This costs $99 per year. Apple already takes money from developers, regardless of whether they actually release apps or not. If you agree to the new store regulations in the EU and only publish an app that goes viral three years later, you will no longer benefit from the grace period advantages shown above.

That's why I personally think that this needs to be improved again. It's a good thing that those who don't earn anything from their apps no longer have to worry about their existence with their sideloading offers. But above all, I still find it unfair that after the three-year period everyone should pay regardless of their income. Once a company has a certain size and sales volume, levies are okay, but not necessarily to Apple. Better than taxes.

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