I think you are underestimating how many apps get over 1M downloads. According to [1], the Google Play Store has over 34000 apps with 1M+ installs, I assume the number is similar for the App Store.
So if you have a popular free app, there is a good chance you will hit the 1M install threshold. This change is basically forcing you to monetize your app. Plenty of people can afford losing $99/year for having a free app that isn't monetized. Not many can afford losing several thousand per month.
The Core Technology Fee still only applies if you want to either
a) distribute outside the Apple App Store, or
b) pay the lower 17%/10% commission.
If you're already distributing the app for free, then you're not going to care about (b), so this only applies to apps that meet all three of the following criteria:
1. Free
2. Popular enough to significantly breach that 1M install threshold
3. Distributed through an alternative App Store
Anyone who has a popular free app out there right now doesn't need to change anything; they'll continue to have exactly the same expenses they had yesterday.
Maybe I'm misreading the original article, but it sounds like it would also apply to apps distributed only through the regular App Store:
> Core Technology Fee — iOS apps distributed from the App Store and/or an alternative app marketplace will pay €0.50 for each first annual install per year over a 1 million threshold.
Only if they choose the “new” terms, they can stay on the existing terms if they want to distribute through the App Store, as it’s free so the commission change doesn’t matter.
Basically seems to kill off Facebook forcing people to a Meta App Store for the free FaceBook app (and thus not being subject to App Store review, which has stopped some of the more brutal privacy invasions they’ve tried)
Small fraction of users but a huge fraction of the market share (and revenue generation share). Being that the DMA was specifically targeting these two things it seems quite at odds with "A free app like Chrome must pay us millions if it wants to distribute itself instead of using the legacy terms deemed illegal". If they didn't allow legacy terms it'd have a bit more of a leg to stand for opening the markets, same as if it didn't apply to apps distributed via third party, but the way it is now seems a contentious combination.
Imagine the new attack vector: You have a mildly successful free/very cheap app. Your competitor starts advertising your app, pushing it up over the 1m threshold and forcing you to start charging (or increase your price) to pay the core charge.
So before the cost was $99 for 100% of users, and now it is $99 for 99.9999% of users, and a higher amount for a tiny, tiny, tiny fraction.