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I don't think it includes updates. From the calculator [0]:

> The first time an app or game is installed by an Apple account in the EU in a 12-month period.

[0] https://developer.apple.com/support/fee-calculator-for-apps-...

> A first annual install may result from an app’s first-time install, a reinstall, or an update from any iOS app distribution option — including the App Store, an alternative app marketplace, TestFlight, an App Clip, volume purchases through Apple Business Manager and Apple School Manager, and/or a custom app.

It does

The first of either an install, reinstall or update in a 12 months period. It does not apply for every single update

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