In a recent court testimony, Apple Fellow Phil Schiller disclosed his initial reservations about Apple’s decision to impose a 27% commission on purchases made outside the App Store (via TechCrunch).
Schiller, who oversees the App Store, expressed concerns that such a fee could lead to compliance challenges and strain relationships with developers.
The legal dispute between Apple and Epic Games, the creator of Fortnite, has been ongoing since 2020. Epic Games filed an antitrust lawsuit against Apple, challenging the company’s App Store policies, particularly the 30% commission on in-app purchases and restrictions on alternative payment methods.
In 2021, U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple must allow developers to direct users to external payment options, aiming to foster greater competition within the App Store ecosystem. In response, Apple adjusted its policies, permitting developers to link to external payment methods but implementing a 27% commission on such transactions.
During his testimony, Schiller revealed that he had significant concerns about this approach. He feared that enforcing commissions on external purchases would necessitate Apple to monitor developers’ sales activities outside the App Store, potentially leading to compliance issues.
Despite these concerns, Apple’s executive team, including CEO Tim Cook and CFO Luca Maestri, decided to proceed with the 27% commission. This decision was influenced by the desire to maintain a revenue stream from transactions facilitated through iOS apps, even if completed externally.
Epic Games has criticized Apple’s implementation of the commission on external purchases, arguing that it undermines the intent of the court’s ruling to promote competition and provide developers with more flexibility in payment options.
The ongoing legal proceedings aim to determine whether Apple’s policies comply with the court’s order and if further modifications are necessary to align with antitrust regulations.
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