Apple confirms iPadOS will fall under its Alternative Business Terms in the EU

Cupertino drops the Core Technology Fee for hobbyist developers with no revenue

Apple is reluctantly bowing to the European Commission's demands that it align iPadOS with the changes planned for iOS. It has also grudgingly added two conditions in which the Core Technology Fee will not apply.

Apple did not specify a date for when the changes would apply, saying only it would be "later this fall." Developers will be able to choose the "Alternative Business Terms" for Apps in the EU or stick with Apple's existing terms.

The European Commission dismissed Apple's pleas that iPadOS should not be placed on the Digital Markets Act's Gatekeeper list because it has a relatively small user count compared to the iPhone and iOS. This, claimed Apple, meant it didn't meet the Gatekeeper threshold.

However, the EC retorted, "Apple's business user numbers exceeded the quantitative threshold elevenfold, while its end user numbers were close to the threshold and are predicted to rise in the near future."

Apple's habit of locking users into its ecosystem also irked Eurocrats, and so iPadOS was brought under the gimlet gaze of DMA obligations.

Vivaldi's Jon von Tetzchner noted that there were few differences between iOS and iPadOS besides screen size. Claims to the contrary have been handily undermined by the ease with which Apple appears to add iPadOS to the same "Alternative Business Terms" as iOS.

In addition to its grudging concessions for iPadOS, which will allow developers to use third-party app stores and web distribution for apps on the platform, Apple also announced two additional conditions in which the Core Technology Fee (CTF) is not required.

The CTF is Apple's way of extracting cash from developers reflecting the value provided by the company's investment in the platform. A developer must pay €0.50 for each first annual install of an app over one million in the last 12 months. The first million installs per year were free.

Nonprofits, educational institutions, and government entities with an Apple Developer Program fee waiver were exempted.

The conditions have now been tweaked so that no CTF is required so long as the developer has no revenue whatsoever – a free app with no ads would be an example of this. According to Apple: "This condition is intended to give students, hobbyists, and other non-commercial developers an opportunity to create a popular app without paying the CTF."

The other change is the addition of a three-year free "on-ramp" for developers with less than €10 million ($10.7 million) in global annual business revenue that adopt the "Alternative Business Terms." Exceed a million first annual installs in that time, and Apple will not demand its pound of flesh. However, grow to earn between €10 million and €50 million ($53.8 million) within the three-year period, and the CTF will be demanded after one million first annual installs to a cap of €1 million ($1.08 million) per year.

We asked Apple if it could be more precise regarding the date and what would happen should a developer grow beyond €50 million in global revenue, but the company did not respond. ®

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