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Apple acknowledged the risk but did not announce a universal safeguard. At an EU Digital Markets Act workshop on March 18, 2024, Apple executive Kyle Andeer said the company was working on a solution after developer Riley Testut warned that a free app could become viral and generate millions of euros in Core Technology Fees (CTFs). Apple’s later documentation added exemptions, a temporary small-developer on-ramp and fee waivers, while also describing a transition from the CTF to a different Core Technology Commission (CTC). However, the public material does not establish that Apple created a blanket protection for every unexpectedly viral free app.
Why a free app could create a multimillion-euro bill
The original controversy was about a mismatch between user growth and revenue. Under Apple’s alternative EU business terms, the historic CTF charged €0.50 for each qualifying first annual install above the first one million in a 12-month period. The charge could apply to a free, paid, ad-supported or freemium app.
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Apple’s definition of a first annual install was broader than a first-ever download. It could include an initial download, a redownload or an update associated with an Apple account during the relevant period. That meant an app could generate fee exposure through activity that did not necessarily produce corresponding income.
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CTF = €0.50 × qualifying first annual installs above the applicable threshold
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| EU first annual installs | Fee-bearing installs | Indicative historic CTF |
|---|---|---|
| 1,000,000 | 0 | €0 |
| 1,500,000 | 500,000 | €250,000 |
| 2,000,000 | 1,000,000 | €500,000 |
| 10,000,000 | 9,000,000 | €4.5 million |
These are illustrative annual calculations, not invoices. Apple’s fee accounting could use rolling 12-month measurements and monthly collection mechanics. Its published example says that 50,000 fee-bearing first annual installs in one month could produce €2,083.33 for that month because the annual amount is apportioned monthly. See Apple’s fee-estimation guidance.
What Apple actually promised in March 2024
At Apple’s March 18, 2024 DMA compliance workshop, Riley Testut—known for GBA4iOS—asked what would happen if a young developer released a free app that unexpectedly reached millions of users. Testut referred to his own earlier experience: GBA4iOS had reportedly been downloaded more than 10 million times when he was a teenager. Applying the proposed €0.50 structure to that historical total produced a hypothetical liability of about €5 million.
That figure was not an Apple invoice. It illustrated what could happen if a viral app’s qualifying EU activity greatly exceeded the threshold while its developer had little or no revenue.
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Apple vice president of regulatory law Kyle Andeer responded that Apple was still working on a solution and did not want young developers or their parents to be afraid to release apps. The report did not identify a cap, insurance arrangement, delayed-payment plan, automatic exemption, eligibility test or timetable. The original account is reported by MacRumors.
So the accurate description is: Apple said it was looking for a fix; it did not announce that it had solved the viral-free-app problem.
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Who was exposed to the historic CTF?
The issue did not apply to every free iPhone app worldwide. The historic CTF was associated with developers choosing Apple’s alternative EU business terms for iOS and iPadOS apps distributed in the European Union. Apple’s standard App Store terms continued elsewhere.
Potentially exposed developers included:
- Free apps distributed through the EU App Store under the alternative terms.
- Freemium apps whose revenue per user was below the fee level.
- Apps whose advertising, subscriptions, donations or sponsorships started after viral growth.
- Apps whose install volume was unpredictable or driven by press coverage, social media or an App Store feature.
- Apps distributed through alternative marketplaces or directly from a developer website under Apple’s Web Distribution framework.
Alternative app marketplaces faced a particularly different risk profile. Apple’s documentation said the marketplace app could owe the fee on every first annual install, including installs before the ordinary one-million threshold.
Apple’s documented protections
Non-commercial free apps with no business revenue
Apple’s EU developer documentation says developers with no business revenue offering free apps without monetization do not require the CTF. Apple describes this as supporting students, hobbyists and other non-commercial developers.
This is not a blanket “free app” exemption. A free download may still be part of a commercial business if it uses advertising, paid upgrades, subscriptions, sponsorships, donations or another monetization arrangement. Developers should rely on Apple’s definitions and declaration requirements—not simply the price shown in the App Store.
See Apple’s EU business-term overview.
The three-year small-developer on-ramp
Apple says eligible developers with less than €10 million in global business revenue, and who have not previously reached exceptional scale, can receive a three-year free on-ramp to the CTF. If revenue rises into the €10 million–€50 million range during that period, Apple documents a €1 million annual cap for the remainder of the on-ramp.
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The protection is temporary, not permanent. Apple says the three-year period begins when the developer signs the Alternative Terms Addendum and ends three years later regardless of later app activity. The developer must also declare global annual revenue before the first app surpasses one million first annual installs to receive the on-ramp benefits. The relevant rules are in Apple’s Core Technology Fee support documentation.
Fee waivers
Apple lists approved nonprofits, accredited educational institutions and government entities as eligible for a fee waiver, subject to the applicable Apple Developer Program rules.
Remaining on Apple’s original terms
A developer can avoid the historic CTF by staying on Apple’s original App Store business terms. The trade-off is significant: the developer does not receive the alternative terms’ benefits, such as alternative app marketplaces and certain alternative payment options. In return, the economics remain closer to a percentage-of-revenue model rather than a usage-based charge on installs.
What changed from 2025 into 2026?
Apple’s current EU support material distinguishes the historic CTF from a later Core Technology Commission. Apple said it planned to transition from the CTF to the CTC beginning January 1, 2026, with the CTC applying to certain digital-goods and services sales rather than simply reproducing the old per-install charge.
Apple also says that, beginning June 26, 2025, a 5% Core Technology Commission applied to certain digital-goods or services sales that developers communicate and promote in an App Store app. Under the alternative terms, Apple described other components including a reduced commission of 10% for the vast majority of developers or 17% in other cases, plus an optional 3% App Store payment-processing fee.
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The precise current obligation depends on the developer’s distribution method, revenue, sales and contractual election. The important distinction is that the CTF was the per-install fee at the heart of the 2024 viral-app controversy, while the CTC is a later sales-linked structure described in Apple’s EU documentation. The transition changes the calculation; it does not prove that Apple fulfilled the specific promise made in response to Testut.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The choice developers actually face
| Option | Main advantage | Main risk or trade-off |
|---|---|---|
| Original Apple terms | More predictable percentage-of-revenue economics | No alternative marketplace or alternative-payment benefits |
| Alternative terms | Access to alternative distribution and payment options | More complex fees, declarations and eligibility conditions |
| Web Distribution | Direct distribution from an eligible developer website | Apple requirements, notarization, install reporting and EU-only availability |
| Alternative marketplace | Potentially different catalog and business model | Marketplace compliance obligations and potentially harsher install economics |
For a free or low-monetization app with unpredictable popularity, the original terms may be the safer financial choice if alternative distribution is not essential. Paying a percentage of actual revenue is generally easier to budget than owing a usage-based fee before monetization catches up.
Alternative terms may make sense when alternative marketplaces, Web Distribution or external payment options create enough commercial value to justify the added complexity. That decision should be modeled rather than made solely because the alternative commission rate appears lower.
How to model the risk before opting in
- Classify the business. Determine whether the developer or entity has business revenue. Do not equate “free” with “non-commercial.”
- Check protections. Review eligibility for the no-revenue treatment, the three-year on-ramp, the €1 million cap during the specified revenue band, or an institutional waiver.
- Forecast EU activity. Model installs above one million and include the effect of redownloads, updates and Apple-account behavior where applicable.
- Model monetization timing. Estimate advertising, subscriptions, paid upgrades, donations and sponsorship revenue by month—not just annual revenue.
- Compare economics. Put the expected CTF or CTC, commission, payment-processing costs and compliance costs beside the original App Store terms.
- Test viral scenarios. Include a launch driven by a social-media post, influencer, press story or platform feature.
- Read the current contract. Review Apple’s current Alternative Terms Addendum and support pages before making an election.
- Keep evidence. Preserve revenue declarations, waiver approvals, install forecasts and eligibility records.
A developer considering Web Distribution should also review Apple’s EU Web Distribution requirements. Direct distribution is not automatically a fee-free escape hatch.
What remains unresolved
The European Commission has investigated Apple’s alternative app-store terms, including the CTF and conditions for alternative marketplaces and Web Distribution. The DMA requires gatekeepers to provide fair, reasonable and nondiscriminatory access conditions and prevents them from forcing developers to use the gatekeeper’s in-app payment system in every circumstance. The Commission’s materials establish scrutiny and investigation—not a final ruling that every Apple fee is illegal.
Apple argues that its fees reflect the value of its technology and platform. Developers argue that per-install charges can deter alternative distribution and punish free apps whose revenue does not rise with popularity. The unresolved policy question is whether Apple’s overall terms make the DMA’s alternatives commercially unattractive or otherwise undermine effective competition.
Based on the public documentation available for this article, there is no specifically named, universal “viral free app” protection that can be identified as the promised solution to Testut’s question. Apple may have changed the structure and added meaningful safety valves, but developers still need to establish their own eligibility and model their exposure under the current terms.
Quick Recap
Practical checklist for a free or freemium developer
- Confirm whether the app is genuinely non-commercial or part of a business.
- Check whether the developer qualifies for the on-ramp or an institutional waiver.
- Estimate EU first annual installs and activity above the relevant threshold.
- Account for updates and redownloads, not only first downloads.
- Estimate revenue per EU user and the delay before monetization begins.
- Decide whether alternative distribution is necessary for the business.
- Compare the original terms with the current EU terms, including CTC provisions.
- Review Apple’s current contractual language immediately before opting in.
- Seek legal or accounting advice if rapid growth could create a material liability.
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