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Apple Working on Solution for App Store Fee That Could Bankrupt Viral Apps (macrumors.com) 91

Posted by msmash from the how-about-that dept.
Joe_Dragon shares a report: Since Apple announced plans for the 0.50 euro Core Technology Fee that apps distributed using the new EU App Store business terms must pay, there have been ongoing concerns about what that fee might mean for a developer that suddenly has a free app go viral. Apple's VP of regulatory law Kyle Andeers today met with developers during a workshop on Apple's Digital Markets Act compliance. iOS developer Riley Testut, best known for Game Boy Advance emulator GBA4iOS, asked what Apple would do if a young developer unwittingly racked up millions in fees.

Testut explained that when he was younger, that exact situation happened to him. Back in 2014 as an 18-year-old high school student, he released GBA4iOS outside of the App Store using an enterprise certificate. The app was unexpectedly downloaded more than 10 million times, and under Apple's new rules with Core Technology Fee, Testut said that would have cost $5 million euros, bankrupting his family. He asked whether Apple would actually collect that fee in a similar situation, charging the high price even though it could financially ruin a family. In response, Andeers said that Apple is working on figuring out a solution, but has not done so yet. He said Apple does not want to stifle innovation and wants to figure out how to keep young app makers and their parents from feeling scared to release an app.
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Apple Working on Solution for App Store Fee That Could Bankrupt Viral Apps More

Apple Working on Solution for App Store Fee That Could Bankrupt Viral Apps

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  • "does not want to stifle innovation" (Score:3, Informative)

    by bill_mcgonigle ( 4333 ) * on Tuesday March 19, 2024 @11:10AM (#64328005) Homepage Journal

    Say it under oath.

    'Good will' in the EU has been burned.

  • They are not (Score:3)

    by DarkRookie2 ( 5551422 ) on Tuesday March 19, 2024 @11:15AM (#64328017)
    Why would they? They don't care if they bankrupt anyone small.

    • Re: (Score:1)

      by Anonymous Coward

      .... Apple does not want to stifle innovation and wants to figure out how to keep young app makers from feeling scared to release an app.

      Translation: We couldn't care less if our fees bankrupt you. But we're trying to come up with something trivial that doesn't reduce our revenue and makes it **appear** that we care.

      • apple will need to sue them EU court to get that fee if some kid runs up an 5M bill. And even if they win what can they really get wage garnishment under EU rules?

        • apple will need to sue them EU court to get that fee if some kid runs up an 5M bill. And even if they win what can they really get wage garnishment under EU rules?

          The example in the summary was of an 18-year-old whose free app went viral. In the USA, 18 is considered an adult. I'm an adult with 20+ years in the work force and I know I couldn't afford a US$5 million bill. Shoot, I couldn't even afford a $1 million bill.

    • Re: (Score:3, Insightful)

      by Linux Torvalds ( 647197 )

      They don't care if they bankrupt anyone small.

      A perfect description of the EU.

      • Windfall taxes and other power-grabs on cash (Score:4, Insightful)

        by Seven Spirals ( 4924941 ) on Tuesday March 19, 2024 @12:42PM (#64328319)
        I suspect it's worse than that. Anytime government or corporations detect a "windfall" they absolutely come running with their hands out. Windfall profit taxes [investopedia.com] are usually proposed at a 30%-50% level. They also want to tax the living hell out of any inheritance or any large cash sale of big items. The bigger the pile of money, the more some government or corporation will want to steal it from you and lay some sort of dubious claim on it. This is just Apple greedily eyeing the windfall a "viral" app might get and shaking down their devs: because they can.
        • Windfall taxes do make sense in principle, but they're rarely used since they're generally implemented too slowly to have the desired effect of correcting a market failure.

          Inheritance, though technically a windfall, is really a separate issue.
          • Windfall taxes are evil power grabs by evil small-minded people, generally. Inheritance taxes would not be necessary if we had a flat sales tax. Rich people have to spend their money in order to benefit from it. If they sit on it as capital investment, then it benefits others by creating new goods and services. There is no need for Windfall taxes unless you're just a jealous person who wants revenge on others for being successful or lucky.
            • You have absolutely no understanding of what it is that you're talking about. There wasn't a single thing there that made sense. I'm not going to be the one to educate you.
              • Ah, I see, something you don't like is not disagreeable because you haven't taken any time to think about it, have no opinions of your own to counter, and can't be bothered to get your brain out of first gear. No, no, it must be that everyone else needs "educating" to "make sense" to you. Go back to TikTok, genius.
                • I didn't say that I disagreed with it, or that you were wrong, or that this would be poor policy. I can't disagree with this, there's nothing to disagree with. "Flat sales tax" ... there's just nothing to say to that. You don't know what you're talking about.

      • Interesting. I typically see the EU described as biased against _big_ business and more protectionist for smaller, regional, independent companies.

        • Re: (Score:2)

          by mjwx ( 966435 )

          Interesting. I typically see the EU described as biased against _big_ business and more protectionist for smaller, regional, independent companies.

          The only bias the EU has is against businesses that break the law.

          The EU typically doesn't affect how small businesses operate in the member states, that's really up to them. Some places are hostile, most countries are not. The UK under the conservatives has been increasingly hostile to SMEs, before and after leaving the EU and I doubt staying in would have changed that.

          European countries in general tend not to like it when big businesses swallow up all the small ones and become "too big to fail" thou

          • Any organisation that is willing to (and has the power to) smack Microsoft on the nose with a rolled-up newspaper, and reach for the squirt-spray bottle to keep Apple in line, has value.

            I'd personally say that the EU single market is vastly more beneficial to SMEs than larger entities. As to the UK leaving the EU, I know a number of friends who operated little spare-room side-businesses that were negatively impacted - that kind of uncertainty, chaos, and administrative expense is much more easily absorbed b

    • Why would they? They don't care if they bankrupt anyone small.

      I think the entirety of your screed is nicely belied by TFS.

      Now begone, Hater!

      • Re: (Score:1, Troll)

        by DarkRookie2 ( 5551422 )

        Why would they? They don't care if they bankrupt anyone small.

        I think the entirety of your screed is nicely belied by TFS.

        Now begone, Hater!

        Jesus fuck. Speak fucking English. Or at least something that can be translated into it.

        • Probably used siri speech to text, or a defective butterfly keyboard or just a foaming at the mouth apple fanboi

        • Why would they? They don't care if they bankrupt anyone small.

          I think the entirety of your screed is nicely belied by TFS.

          Now begone, Hater!

          Jesus fuck. Speak fucking English. Or at least something that can be translated into it.

          What's wrong: Are some of the words too big and scary for you?

          I can't help it that you have the vocabulary skills of a two year old.

    • It is EU regulation that is forcing them to do this. Also, why would you choose to release under a model that could bankrupt you?

  • Apple will simply have to come later (Score:4, Insightful)

    by TWX ( 665546 ) on Tuesday March 19, 2024 @11:19AM (#64328033)

    As was commonly the case during the DOS/Windows and MacOS era, many applications will only come to the Apple platform after the DOS or Windows platform proves successful. It didn't matter how slick or easy the Apple product was, the risks were higher and in that era of small teams or individual software developers it didn't make sense to pursue the higher-risk platform before the lower-risk one.

    Frankly I'm surprised with these walled-garden models that this hasn't happened even sooner.

    • try asking abode to pay 0.50 per app install (and the full CS suite is like 10+ apps) on mac os and see how long before they exit apple.

      • Apple is only charging if you don't use their app store. Adobe is a prime example of someone that might want to distribute their own but I don't think you know how much their monthly fee is if you think a half Euro per year per device install will matter. It's onerous for free apps but very good for paid apps that don't have to use Apple's payment system.

        That fee is once a year per user that has the app installed or updated on one or more devices during that year. Called a "first annual install."

        First a

        • Gotta wonder, why no Core Technology Fee on Mac for apps sold through other stores or developers own websites? Apple is fine not collecting a cent from that market. Why the double standard?

          • Apple is fine not collecting a cent from that market.

            No apple is not, if they could force everyone into buying from a macstore they definitly would. But fortuunatly that ship has sailed years ago.

          • Gotta wonder, why no Core Technology Fee on Mac for apps sold through other stores or developers own websites? Apple is fine not collecting a cent from that market. Why the double standard?

            Not worth the paperwork.

            Plus, macOS has a completely different software availability model.

            • macOS has a completely different software availability model.

              And is a major inspiration for the new EU rules.

              • macOS has a completely different software availability model.

                And is a major inspiration for the new EU rules.

                Wrong.

                • The fact that iOS software distribution is different from macOS is very much a part of this.

                  • The fact that iOS software distribution is different from macOS is very much a part of this.

                    No, it isn't. At least, it shouldn't be. Macs and iPhones are not the same, in several different ways. Therefore, in the interests of security and safety, the software distribution model deserves to take that into account.

                    As Apple's Craig Federighi Testified:

                    "The Mac from the beginning has been part of a generation of systems where the expectation is you can get software from wherever -- you can hand it to your friend on a floppy disk and run it, that's part of the expectation. But Mac users also expect a d

          • If I had to venture a guess I'd say because Apple makes enough money marking up their hardware (and making DIY repairs hella difficult and annoying). That, and Mobile apps are the jam spread on their biscuits for revenue now? Maybe, I don't know.

            But even MSFT seems to treat the consumer OS market as less than a primary income source (to say the least.. Whose actually paid any significant amount for a Windows 11, or 10 for that matter, upgrade lately?), and Apple doesn't 'do' Server anymore (sadly..). App

            • Whose actually paid any significant amount for a Windows 11, or 10 for that matter

              Free isn't even cheap. Home and "Pro" users of Windows have to beta test all Windows updates now before they get rolled out to paying enterprise customers. That comes at a cost in lost time at the very least. The number of buggy updates has been increasing since they got rid of most of their internal testing.

        • So then, Apple's own little proposed EU Prima Nocta doctrine? That's nice. If not already a juggernaut app developer you better use the Apple store, and once your users get used to finding it there, good luck moving away from it, I guess. Malicious compliance plus Prima Nocta terms for the peasantry in the fiefdoms devoid of land holdings.

          I seems like only yesterday Apple LOVED them some Europe (particularly Ireland) for their amicable taxation. I guess that ship has sailed (pun intended).

  • This is a problem that should be familiar to anyone who's toyed around with deploying something scalable to the public cloud. If you don't put a cap on resources usage, you could find yourself spending a lot more than you expected if demand spikes. Apple can address this by letting developers specify a maximum number of app activations and require manual intervention if that ceiling should be lifted.

    • Apple can address this by letting developers specify a maximum number of app activations and require manual intervention if that ceiling should be lifted.

      Why should that be a fix? It uses zero Apple resources. Apple can address this by not charging developers for customers using their own devices. Imagine if Microsoft tried to bill a programmer every time someone else ran an .exe

      For that matter, the way they are counting these side loaded apps, even side loading an app still requires an Apple ID to activate it. That's how I'm reading it.

      • "Imagine if Microsoft tried to bill a programmer every time someone else ran an .exe"

        That's not what is happening here.

      • Why should that be a fix? It uses zero Apple resources. Apple can address this by not charging developers for customers using their own devices.

        Well, sure. In the same sense that answer to "How do you avoid a head injury from falling off of a bicycle?" is "Don't ever ride a bicycle!".

        I'm taking for granted that Apple is going to charge this fee, and pointing out that the concept of charges that rise with higher-than-expected adoption of an app/service isn't unprecedented.

  • apple music does not need to pay the core fee but spotify will.

    And what is apple doing for spotify?
    Hosting content No other then maybe the app installer files
    Paying artists No
    Payment processing at high fees maybe if they want apple to do so
    Offering dev tools yes
    Checking content maybe and apple in the main store can make up rules and maybe say ban artists X or we remove your app.

  • Already common practice (Score:3)

    by burtosis ( 1124179 ) on Tuesday March 19, 2024 @12:16PM (#64328247)
    A friend of mine had a gaming short on YouTube go viral in the 8 digit range. However they did not qualify for monetization because they did not meet the 3 million views in 90 days nor meet the 3000 watch hours of non-streamed full length content. They did pick up some subscribers but were shafted and YouTube took all of the revenue generated, even indirectly.
    • That one video should have been their onramp to monetization then they could reap the rewards of future videos.

      • Re: (Score:2)

        by szo ( 7842 )

        This is the YT version of 'paying in exposure' and you think it's OK? In no other situation would it be even remotely plausible to say "ok, you did the job, but I don't feel like paying, but I'll pay next time"

        • No, it's not paying for exposure, they gave him exposure for free, it's making one's bones. He got to share his creation with the world. He knew the deal going in. Yes, it's completely acceptable that YouTube screens who they monetize and has set a low bar for entry. What is this nonsense about not paying for a job? He wasn't hired to do a job there was no pre-arrangement for an exchange of money for services. Your friend is not a victim. If they are any good they should be able to parlay that success

    • Re: (Score:2)

      by unrtst ( 777550 )

      This is nowhere near the same. YouTube hosts that content for free, and delivers it to end users without charging you nor the end user. YouTube takes the ad profit (or a percentage thereof).

      If this was the same, then your friend would be on the hook to pay some amount for every person that streamed that content. At $0.50 a view, it would cost your friend millions (7-8 digits). Instead, your friend simply didn't make any money, but didn't have to pay when it went viral either.

  • Developers have to pay Apple to be on their app store? It means a lot of people will simply publish their app for Android, and not Apple, easy.

    • they pay that dev fee now on google that same fee is lower.

    • The EU regulations prevent Apple from extracting the payment for their services (Apple Store doesn't develop or run itself for free) from successful apps by taking a percentage of revenue. So instead Apple charges per use. Google does the same thing.

      Good news however is that you can develop your own app store for iOS in EU, and you are free to publish your apps and allow developers to publish on your app store for free. You pay for the cost of development, maintenance. and of course server/bandwidth cost

  • Solution: don't make things for Apple (Score:3)

    by Targon ( 17348 ) on Tuesday March 19, 2024 @12:49PM (#64328341)
    When you have this sort of problem, the solution is easy, developers should avoid making their apps available for Apple users, and bingo, problem solved.
  • On one hand, I think they should wave the fee for a free AP. On the other hand, The App Store is polluted with all these free-junk Apps that either do nothing more than a few menial tasks, or are just a face for some web service. I might be ok with some cost to developers for hosting a free App if it makes business plans consider the cost. The sleezey business plan of a free App meant to go viral usually is aiming to make money off the data. Hopefully Apple is using that money forward for scr

    • apple can force webkit and maybe use that to kill web browser apps on the mac desktop.

      Now for stuff like netflix apple is not makeing the content or hosting it and they have an there own content they make and host that does not cost them any cut of the income to be in the app store that is the only place to get apps.

  • IIRC Apple still lets you opt into the old model in the EU, pay only a cut of all payments, but all payments for your app must go through Apple. The commission is never over 100%, so no developer would ever accumulate debt.
  • And they control the platform, it's not like money can't be recovered from users directly.

    Worst case Apple could just shut the application down and say the developer didn't pay a fee.

    If someone got slapped with $5M like that I doubt it would stand up in court.

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