Did Apple's 2024 EU app rules replace commissions with an installation toll?

On January 25, 2024, Apple announced changes to iOS, Safari and the App Store in its Newsroom. EU developers would gain alternative distribution and payment options. Developers accepting its new business terms would receive lower App Store commission rates. Apple also announced a Core Technology Fee of €0.50 for qualifying installations above an annual threshold.

The record shows a change in what Apple charged for, not a promise to stop charging. Alternative marketplaces could remove App Store sales commissions. They did not automatically remove Apple's installation fee. App Store distribution could carry both.

This examines the January 2024 offer for iOS in the EU, not Apple's current commercial terms.

What required Apple to open distribution?

The relevant law was Regulation (EU) 2022/1925, the Digital Markets Act. Article 6(4) requires designated gatekeepers to allow the installation and effective use of third-party applications and app stores. It also addresses access to those applications through routes other than the gatekeeper's own core platform services.

The European Commission designated Apple's App Store, iOS and Safari as core platform services in September 2023. Apple's January announcement said the changes would become available in March 2024, aligning with the DMA compliance deadline.

Article 6(4) permits strictly necessary and proportionate measures to protect hardware and operating-system integrity. It does not prescribe Apple's €0.50 installation charge. That figure was Apple's commercial response to the distribution obligation, not a tariff written into the regulation.

Which terms did developers have to accept?

Apple offered a choice. Developers could retain its existing business terms or adopt the new EU terms. But developers seeking the newly announced alternative distribution or payment-processing capabilities had to accept the new terms.

That distinction matters. A developer could not take the alternative marketplace permission while simply retaining the old fee arrangement. Apple connected the new distribution rights to a different charging structure.

Apple described that structure as payment for more than App Store distribution. Its announcement named its platform, developer tools and technologies alongside discovery and payment processing. The Core Technology Fee therefore reached apps that did not use the App Store as their sales counter.

What commissions remained?

For iOS apps on the App Store under the new EU terms, Apple announced commissions of 17% on transactions for digital goods and services. The reduced rate was 10% for qualifying developers and subscriptions after their first year.

The existing programs explain those categories. Apple's Small Business Program offered qualifying developers a 15% commission rate under its established terms. Its subscription documentation described developers receiving 85% of subscription revenue, less applicable taxes, after a subscriber accumulated 1 year of paid service. Small Business Program participants received that share from the first billing cycle.

The January EU offer lowered relevant commission rates. It did not abolish commissions on App Store sales. Choosing a different payment processor inside an App Store app was not the same as distributing the app outside the store.

Was payment processing a separate charge?

Yes. Under the new terms, Apple announced an additional 3% fee for developers using App Store payment processing. Developers using an alternative payment service provider, or directing users to their website to process payments, would not pay Apple that processing fee.

For an App Store transaction subject to the 17% commission, Apple's processing brought the combined percentage to 20%. At the reduced 10% commission, it brought the combined percentage to 13%. Neither calculation included the Core Technology Fee.

An outside processor could eliminate Apple's 3% processing charge without eliminating the remaining App Store commission. Any charge from that outside processor would belong to a separate commercial agreement. Distribution, commission and payment processing were distinct parts of the developer invoice.

What counted as an installation?

Apple announced a €0.50 Core Technology Fee for each first annual install above 1 million. The threshold applied to an app's installations across the App Store and alternative marketplaces, rather than providing a separate allowance for each route.

Apple's fee documentation defines a first annual install by an account in the EU over a 12-month period. An initial installation, reinstall or update can establish that period. Further installations by the same account during that period do not each generate another first annual install.

The unit was therefore not every download, and it was not necessarily a newly acquired customer. An existing user updating an app could count under the annual measurement.

For an ordinary app subject to the original fee, 2 million first annual installs produced €500,000 in Core Technology Fees: 1 million chargeable installs multiplied by €0.50. That calculation required no purchase price, subscription receipt or advertising revenue.

Did another marketplace remove Apple's bill?

It could remove the App Store sales commission. Apple's January announcement nevertheless expressly applied the Core Technology Fee to apps distributed through the App Store, alternative marketplaces, or both.

That created two different outcomes. An app distributed through an alternative marketplace could face an installation charge without an App Store sales commission. An app remaining on the App Store under the new terms could face both.

Marketplace operators had a sharper version of the rule. Apple's documentation specified that alternative marketplace apps themselves incurred the Core Technology Fee for every first annual install, without the ordinary 1 million allowance. The marketplace app and the apps it distributed were separate charging subjects.

Opening another storefront did not place that storefront outside Apple's fee structure.

Who was outside the installation charge?

The threshold was substantial. An ordinary app below 1 million first annual installs did not owe the Core Technology Fee under the announced formula. Apple also identified eligible nonprofit organizations, accredited educational institutions and government entities as exempt, connecting eligibility to its membership fee-waiver framework.

That framework is narrower than simply describing an app as free. Apple's waiver documentation sets organizational eligibility requirements. A zero purchase price does not establish nonprofit or educational status.

Developer membership was another distinct charge. Apple listed its standard Developer Program membership at $99 per membership year, or local currency where available. Waiving membership, avoiding a sales commission and remaining below an installation threshold were different routes through different charges.

Apple estimated that fewer than 1% of developers would pay the Core Technology Fee. The January announcement did not publish the underlying model or an app-level distribution of projected liabilities. That estimate described expected incidence, not a limit on what an affected developer could owe.

Did commission become an installation toll?

Not across the board. Apple's January 2024 terms substituted an installation charge for its sales commission on qualifying externally distributed apps, while allowing installation charges and commissions to coexist on App Store apps. The threshold protected ordinary apps with smaller installation counts. Above it, Apple's claim on the developer no longer depended entirely on a sale. Alternative distribution changed the basis of payment. It did not guarantee an escape from Apple's fees.