Apple revises its DMA rules after pressure, but keeps the Core Technology Fee intact

No, Apple’s new and controversial “Core Technology Fee” isn’t going away for EU app developers who opt into the iPhone maker’s new business terms designed to comply with the region’s Digital Markets Act. However, today Apple is announcing a handful of smaller concessions driven by feedback from its app developer community, it says. Notably, the company will now no longer require that corporate entities must sign up for the new DMA terms along with all their sub-accounts, nor will it require a standby letter of credit. In addition, the move to opt into the DMA terms is no longer a one-way switch. Instead, developers under certain circumstances will have the option for a one-time switch back to the existing terms — meaning the standard 15% to 30% commission, not the reduced one under the new rules.

However, these changes don’t address the major complaints with Apple’s DMA rules, which involve reducing commissions on App Store purchases in favor of other new fees. At issue is Apple’s institution of a new “Core Technology Fee,” which requires developers to pay Apple €0.50 for each first annual install per year over a 1 million threshold for apps distributed outside its App Store.

Larger developers like Spotify and Epic Games have lashed out at Apple’s plans to “comply” with the DMA, calling its plan “extortion” and “bad-faith” compliance, among other things. Other tech companies, including  Meta, Mozilla, and Microsoft have also criticized Apple’s DMA rules, with Meta CEO Mark Zuckerberg saying the requirements were “so onerous” he didn’t see how any developer would be able to adopt them. A consortium of developers, led by Epic and Spotify, also penned an open letter to the European Commission, asking the government to assess Apple’s compliance and take “swift, timely, and decisive action” against the tech company to protect developers.

Apple didn’t make any move to adjust its fee structure with these new changes. Rather, it’s adjusting some of the more obviously less compliant terms — like the rule that said that marketplace app developers would need a €1,000,000 letter of credit from an A-rated financial institution to receive the DMA entitlement. That would prevent individual and smaller developers from signing up, which would mean Apple wasn’t fully in line with the law.

The other change will allow a larger corporate entity to pick and choose which of its developer accounts opt into the DMA rules, and which do not at the developer account level. Before, Apple was requiring that corporations sign up each membership it controls if it chose to opt into the DMA rules. That also doesn’t make sense, as various arms of a larger corporation should be able to make their own business decisions and act accordingly.

Apple may have known in advance that these sorts of rules wouldn’t fly and chose to pull them back ahead of a directive to do so as a gesture of compliance and “listening” to its community.

Another change sounds like it would make it easier for developers to test the DMA rules and then switch back, but that’s not necessarily the case.

Instead, Apple says developers can terminate the DMA Addendum one time without terminating their Developer Agreement — but only if “you have never had an Application be an Alternative App Marketplace (EU), be distributed through an Alternative App Marketplace (EU), use Linking Out, or use Alternative Payment Processing.”

In other words, if the developer never actually began to do business under the new terms.

Signing the agreement doesn’t give developers the ability to terminate their agreement a second time if they have already done so, the company says. Plus, Apple says it will still invoice the developer terminating its agreement for the Core Technology Fee, which has to be paid within 30 days. They can then choose to opt back into the DMA rules at a later date, if desired.

Apple announced these changes to its DMA rules alongside the launch of Xcode 15.3 and the latest SDKs for iOS 17.4, iPadOS 17.4, macOS 14.4, tvOS 17.4, visionOS 1.1, and watchOS 10.4. Developers can now begin to submit apps under the DMA terms, Apple says, and can now measure the number of first annual installs their apps have accumulated.

The company additionally updated its App Review Guidelines to include references to the new DMA rules, including that app developers cannot copy the names, icons, or imagery of other mobile platforms or alternative marketplaces. It also says that alternative app marketplaces cannot compile personal information on users unless they specifically consent, nor can they use public databases to collect that personal information. It also says apps that don’t comply with its guidelines will be blocked from installation — including via alternative app marketplaces.