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From John Gruber’s excellent summary of last week’s DMA proposal:

The Core Technology Fee (CTF) disrupts the free/freemium model used by Apple’s biggest rivals and competitors. Meta’s apps are all free: WhatsApp, Instagram, Facebook, and now Threads. Meta has paid Apple effectively nothing for those apps, ever. The YouTube app offers IAP subscriptions but most of Google’s popular iOS apps are just completely free, so Google pays Apple nothing. Spotify has 500 million worldwide users, split 40-60 between paid and free (ad-supported). That means Spotify likely has roughly 100 million free users on iOS -- and Spotify pays Apple nothing.

If any of these companies, with hundreds of millions of EU users, opts in to the new EU rules (and thus opts out of the existing App Store rules), they’ll be on the hook to pay Apple hundreds of millions of dollars (well, euros -- but they’re roughly 1:1) per year.

At first glance, this sounds like the “re-thinking” of the App Store I wished for back in Issue 544. Except it isn’t. 😬 The opt-in nature of Apple’s proposed changes will mean none of those huge companies that distribute free apps would ever choose to sabotage themselves by choosing the new deal, effectively cementing that part of the original App Store structure forever. I’m not terribly surprised that what I was suggesting wasn’t possible, as applying a new mandatory fee structure on large companies that have been paying nothing would have been incredibly challenging, and also invited yet more scrutiny on Apple.

I didn’t see any speculation about a two-tier system before this announcement, but it makes sense for Apple, who is presumably happy with how it all worked before these changes and, I believe, would be happiest if everyone stuck with the original App Store financial structure.

It’s going to be hard for anyone except a small number of billion-dollar companies to adopt these terms, so I think I’m done talking about it. I didn’t expect it would be for smaller developers, but this is not a scheme for anyone reading this newsletter to get involved with. The risks of the CTF are too significant. We should leave the huge companies and governments alone to fight with each other over this.

I tried several times to write more on this subject this week, but it all feels a little pointless. Anything that you or I can say makes no difference at all. All I’ll say is that I don’t feel good about any of the involved parties right now. What a messy situation.

Dave Verwer  

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And finally...