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I heard that there are some known issues with publishing GPL software on App Store and GPL may be incompatible with restrictions placed by App Store.

EPL (Eclipse Public License) is another copyleft-like license that could serve as an alternative for GPL.

Is it compatible with App Store? Are there any known issues or incidents related to it?

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There is an apparent incompatibility between the Minimum Terms of Developer’s End-User License Agreement (emphasis added) on the one side

  1. Scope of License: The license granted to the End-User for the Licensed Application must be limited to a non-transferable license to use the Licensed Application...

and the GPL License (here as v3)

  1. Basic Permissions.

All rights granted under this License are granted for the term of copyright on the Program, and are irrevocable provided the stated conditions are met. This License explicitly affirms your unlimited permission to run the unmodified Program. The output from running a covered work is covered by this License only if the output, given its content, constitutes a covered work. This License acknowledges your rights of fair use or other equivalent, as provided by copyright law.

You may make, run and propagate covered works that you do not convey, without conditions so long as your license otherwise remains in force. You may convey covered works to others for the sole purpose of having them make modifications exclusively for you, or provide you with facilities for running those works, provided that you comply with the terms of this License in conveying all material for which you do not control copyright. Those thus making or running the covered works for you must do so exclusively on your behalf, under your direction and control, on terms that prohibit them from making any copies of your copyrighted material outside their relationship with you.

Conveying under any other circumstances is permitted solely under the conditions stated below. Sublicensing is not allowed; section 10 makes it unnecessary.

on the other side.

The EPL License is not a copyleft license, as it does not force derivative works to be under the same license. Therefore, if you include an EPL licensed library in your software you will be able to distribute it through the App Store using an EULA which is compliant with Apple's minimum terms.

On the other hand, the EPL license itself would not satisfy Apple's minimum requirements for an EULA, as it includes this language (emphasis added):

  1. GRANT OF RIGHTS

    a) Subject to the terms of this Agreement, each Contributor hereby grants Recipient a non-exclusive, worldwide, royalty-free copyright license to reproduce, prepare Derivative Works of, publicly display, publicly perform, Distribute and sublicense the Contribution of such Contributor, if any, and such Derivative Works.

There is an (old!) FSF article about the issue, but I am not entirely sure if Apple's rules have not changed in the meantime. This article lists a few more issues and incompatibilities.

There is a similar question here which pulls together the different items related to GPL (if Apple would be allowed to distribute GPL-licensed SW), but it does not cover EPL.

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