What specific fees has Apple proposed for external purchases?

Apple has proposed a 15% commission for purchases made in 'standard apps.' For apps participating in specific Apple partner programs (such as Video, News, and Mini Apps Partner Programs) and for subscription renewals, the proposed fee is 10%. Apps enrolled in Apple's Small Business Program would face a lower 5% fee for external transactions.

Why isn't the Supreme Court resolving this fee dispute?

The U.S. Supreme Court declined to hear appeals on the *original* Epic Games v. Apple lawsuit in early 2024. This action left the 9th Circuit Court of Appeals' ruling in place, which mandated Apple allow alternative payment links. The current dispute over the *amount* of fees Apple can charge for these external transactions is a *new phase* of the legal process, stemming from the implementation of that earlier ruling. It is currently being litigated at the District Court level, with guidance from the 9th Circuit, and could potentially be appealed again in the future.

How will this legal outcome impact app developers?

The final decision on these fees will directly influence developers' profitability and business strategies. If Apple's proposed fees are upheld, the financial advantage of using alternative payment methods will be significantly reduced. If the fees are substantially lowered, developers could realize greater savings, potentially leading to more competitive pricing for consumers or increased investment in app development and innovation. The ongoing uncertainty requires developers to carefully plan their monetization approaches.

What is Apple's Small Business Program, and how does it relate to these fees?

Apple's Small Business Program is an initiative that reduces the standard App Store commission from 30% to 15% for developers who earn less than $1 million in net sales per year. Under its new proposal for external payments, Apple is extending a similar benefit, proposing a 5% fee for off-App Store purchases made by developers enrolled in this program. This aims to provide a more favorable rate for smaller developers compared to larger companies.

What are the broader implications for the tech industry?

This case is a bellwether for the ongoing global debate on platform power and antitrust. The court's decision will help define the legitimate economic value of operating a dominant digital platform and how much 'toll' can be charged for access. It could set a precedent for other app store operators and influence future regulatory actions aimed at fostering competition in digital ecosystems worldwide.

Image: courtesy of Theverge

techAugust 14, 2026By Veridact EditorialUpdated Aug 14

The Price of Freedom: Apple's Proposed Off-App Store Fees Spark New Legal Fight Over App Monetization

Apple has unveiled a new fee structure, proposing commissions of up to 15% on purchases made outside its App Store on iOS devices within the U.S. This move comes as Apple complies with a court order requiring it to allow alternative payment options. Epic Games, the company behind the popular Fortnite, has swiftly condemned these proposed fees, arguing they are excessive and undermine the spirit of the original legal mandate. The ongoing contention centers on the economic value Apple can legitimately claim from transactions that bypass its proprietary in-app purchase system, a battle that stands to reshape how app developers monetize their creations and how platform owners exert control.

Outlook

The immediate future of app monetization on iOS in the U.S. now rests with the U.S. District Court for the Northern District of California. This court is tasked with scrutinizing Apple's proposed fees in light of previous rulings and Epic's objections. The 9th U.S. Circuit Court of Appeals has already provided guidance, instructing the district court to determine a fair fee by considering the intellectual property Apple uses to facilitate these 'linked-out' purchases, while ensuring costs are reduced 'equitably and proportionately.'

Developers should prepare for continued legal back-and-forth over the precise percentage Apple can charge. This means that while the ability to offer alternative payment options is now a legal requirement, the actual financial advantage these options provide to developers remains in limbo until a definitive judicial decision on the fee structure emerges. The outcome will inevitably influence how developers design and monetize applications, potentially creating new business models or, conversely, reinforcing the current economic dynamics of the App Store ecosystem. Until a final ruling, the uncertainty will loom large over strategic planning for many in the app economy.

Background

The current legal confrontation between Apple and Epic Games represents the latest, and perhaps most granular, skirmish in a protracted war over the economics and control of Apple's dominant iOS App Store. At its core, the dispute challenges Apple’s long-standing mandate that app developers exclusively use its proprietary in-app purchase (IAP) system, from which Apple traditionally levied a 30% commission. This policy was the subject of Epic Games' initial lawsuit, filed in August 2020, which sought to break what it characterized as Apple's anti-competitive stronghold over the mobile app market.

While the original lawsuit saw Epic Games largely unsuccessful in its broader antitrust claims, a pivotal victory was secured through U.S. District Judge Yvonne Gonzalez Rogers' September 2021 ruling. This decision, later upheld by the 9th U.S. Circuit Court of Appeals, mandated that Apple must permit app developers to include 'buttons, external links, or other calls to action' within their apps, enabling users to pursue alternative payment options outside the App Store environment. This was a direct challenge to Apple’s walled-garden approach, opening a crack in its tightly controlled ecosystem.

In early 2024, the U.S. Supreme Court declined to hear appeals from either Apple or Epic regarding the initial lawsuit. This inaction effectively solidified the 9th Circuit's injunction, cementing the requirement for Apple to allow external payment links. The current development, confirmed on August 13, 2026, is Apple's direct response to this judicial mandate: a formal proposal outlining the commissions it intends to charge on these now-permitted 'off-App Store' purchases.

Apple's filing details a tiered commission structure. For transactions within 'standard apps,' Apple proposes a 15% fee. A reduced 10% fee is suggested for apps participating in specific Apple partner programs—such as the Video Partner Program, News Partner Program, and Mini Apps Partner Program—as well as for subscription renewals. The lowest proposed tier, 5%, is reserved for apps enrolled in Apple's Small Business Program, which typically applies to developers earning less than $1 million annually in net sales.

Epic Games immediately voiced its strong opposition to these proposed fees, arguing they remain excessive and fundamentally undermine the court's original intent. Epic contends that such high fees would negate the financial incentive for developers to offer alternative payment methods, effectively maintaining Apple's economic grip despite the legal mandate. The 9th Circuit, in a 2025 document (EPIC GAMES, INC. V. APPLE INC., No. 25-2935), provided specific instructions to the district court on this matter, stating that in determining the appropriate fee, it should consider 'the fact that most of the intellectual property at issue is already used to facilitate IAP, and costs attributed to linked-out purchases should be reduced equitably and proportionately.' This guidance suggests a judicial inclination towards a lower, more justified fee than a simple percentage of the transaction amount.

The legal focus has thus transitioned from whether alternative payment options are allowed to how much Apple can charge for the underlying platform services that enable these transactions. It is a nuanced but financially profound shift in the battleground, moving from a question of access to a question of valuation.

Precedents

The current fee dispute is not an isolated legal anomaly but rather a significant chapter in a broader, global narrative concerning the market power of dominant digital platforms. Across various jurisdictions, including the European Union with its Digital Markets Act (DMA) and countries like South Korea, regulators and courts are increasingly scrutinizing how tech giants operate their app stores and control access to their ecosystems. These efforts consistently aim to curb perceived anti-competitive practices and foster greater competition.

For instance, South Korea passed legislation in 2021 specifically requiring app store operators to permit alternative payment systems, predating the U.S. court's mandate on Apple. While the 'right' to offer external payments became law there, the subsequent debates around the 'fees' charged for these alternatives have remained contentious, highlighting the complexity of valuing platform services. Similarly, Japan's Fair Trade Commission has also pushed for greater openness in app store policies, demonstrating a worldwide regulatory convergence on this issue.

Historically, the concept of a 'platform fee' or 'toll' for facilitating commerce is well-established. From traditional retail landlords charging rent to credit card networks taking a percentage of every transaction, infrastructure providers have always monetized their services. The 30% commission, widely adopted by Apple and Google for their app stores, became an industry benchmark. However, this benchmark has faced increasing pressure as developers argue that the value proposition of the platform, particularly for established apps that drive their own user acquisition and marketing, does not always justify such a substantial cut.

Past antitrust cases, such as the landmark proceedings against Microsoft in the 1990s regarding its bundling of Internet Explorer, illustrate how judicial interventions can fundamentally reshape the business practices of dominant tech companies. The typical pattern involves the company in question attempting to comply with the letter of the law while simultaneously seeking to preserve as much of its existing business model and revenue streams as possible. Apple's proposed fee structure for external payments fits squarely within this historical pattern: it is a strategic adjustment aimed at retaining revenue from transactions that, by court order, can now bypass its direct IAP system. The courts are now tasked with the intricate challenge of defining the legitimate economic value of the underlying platform services that enable these external transactions—a complex and precedent-setting task in the rapidly evolving digital economy.

The ultimate resolution of this fee dispute carries profound implications that will resonate far beyond the immediate litigants, Apple and Epic Games. For the vast ecosystem of app developers, particularly the smaller studios and independent creators, the final percentage Apple is permitted to charge will directly impact their financial viability and, consequently, their capacity to innovate, maintain, and expand their applications. A high fee, even if below the traditional 30%, could significantly diminish the financial benefits of offering alternative payment methods, potentially negating the court's original intent to foster greater competition and choice. This could force developers to choose between absorbing costs, passing them to consumers, or abandoning alternative payment options altogether.

For Apple, the outcome is critical as it could establish a definitive precedent for how it monetizes its immensely valuable iOS ecosystem. If the courts impose a drastically reduced or negligible fee for external payments, it would compel Apple to fundamentally re-evaluate its revenue strategy. This might involve exploring new monetization avenues, adjusting its developer program incentives, or even altering its overall investment approach in the iOS platform. The dispute is not merely about a percentage point here or there; it is a battle over potentially billions of dollars in annual revenue and, more critically, over the fundamental economic architecture of its platform.

Consumers, while not direct parties in the lawsuit, also have a significant stake. A more competitive environment for payment processing, driven by lower platform fees, could theoretically translate into lower prices for in-app purchases, subscriptions, and digital content, as developers pass on their savings. Conversely, if Apple's fees remain substantial, developers may simply absorb the costs, or find alternative ways to recoup revenue, potentially through increased advertising or other monetization models that do not directly benefit the consumer through lower prices.

On a broader scale, this case is a pivotal contribution to the global dialogue surrounding platform power, antitrust enforcement, and fair competition in the digital age. It represents a judicial attempt to strike a delicate balance between the rights of platform owners to profit from their substantial investments in intellectual property and infrastructure, and the imperative to prevent anti-competitive behaviors that can stifle innovation, limit consumer choice, and disproportionately harm smaller businesses. The final ruling will provide a clearer, legally binding definition of what constitutes a 'fair' charge for foundational digital infrastructure, thereby influencing future regulatory efforts and business models across the digital world.

Scenarios

Analysis

1. Court Largely Upholds Apple's Proposed Fees (with minor adjustments): One plausible outcome is that the U.S. District Court, after thorough review, largely agrees with Apple's justification for its proposed fee structure. The court might deem the 15%, 10%, and 5% tiered fees, or figures very close to them, as reasonable compensation for the underlying platform services Apple provides, even for external transactions. This outcome would allow Apple to continue generating significant revenue from purchases initiated within its ecosystem, regardless of the payment method. For app developers, this would mean that while the option to use alternative payment links exists, the financial incentive to do so might be marginal, as a substantial portion of potential savings would still be captured by Apple. This could lead to fewer developers actively promoting external payment options, effectively limiting the practical impact of the original injunction.

2. Court Mandates Significant Reduction in Fees: A second, equally plausible outcome is that the court finds Apple's proposed fees to be excessive, particularly in light of the 9th Circuit's guidance to consider 'equitably and proportionately' reducing costs. The court might rule that Apple has not adequately demonstrated the direct, incremental costs associated with facilitating these specific 'linked-out' transactions, distinct from the costs already covered by the App Store's existing infrastructure. This could result in a court order for a much lower fee, perhaps in the low single digits or even a fixed, nominal amount per transaction. A substantially reduced fee would create a powerful incentive for developers to steer users towards external payment methods, potentially fostering greater competition in payment processing and significantly boosting developers' profit margins. This scenario would put considerable pressure on Apple's traditional App Store revenue model.

3. Protracted Legal Appeals and Uncertainty: Given the immense financial stakes and the precedent-setting nature of this case, it is highly probable that the losing party, whether Apple or Epic, will appeal the District Court's decision on the fee structure. This could escalate the legal battle through further rounds of litigation, potentially returning to the 9th U.S. Circuit Court of Appeals, and conceivably leading to a renewed attempt to bring the specific question of fee legality before the Supreme Court. This scenario would extend the period of uncertainty for app developers, investors, and the broader tech industry, delaying any definitive shifts in app monetization strategies for years until a final, unappealable ruling is achieved.

Timeline

2020-08

Epic Games Files Lawsuit Against Apple

Epic Games initiates a lawsuit against Apple in the U.S. District Court for the Northern District of California, challenging Apple's App Store policies, specifically its mandatory in-app purchasing system and 30% commission structure.

2021-09

District Court Issues Key Injunction

U.S. District Judge Yvonne Gonzalez Rogers rules largely in favor of Apple but issues a crucial nationwide injunction requiring Apple to allow developers to direct users to alternative payment options outside the App Store.

2023-04

9th Circuit Upholds Injunction

The 9th U.S. Circuit Court of Appeals largely affirms the District Court's ruling, specifically upholding the injunction that mandates Apple permit external links for payments. Both Apple and Epic Games subsequently seek review from the Supreme Court.

2024-01

Supreme Court Declines Original Appeals

The U.S. Supreme Court declines to hear appeals from both Apple and Epic Games on the initial lawsuit, thereby leaving the 9th Circuit's ruling, including the injunction requiring alternative payment options, in full effect.

2025-XX

9th Circuit Guidance on Fee Determination

A 9th U.S. Circuit Court of Appeals document (EPIC GAMES, INC. V. APPLE INC., No. 25-2935) provides guidance, stating that the district court should determine the appropriate fee for linked-out purchases, taking into account Apple's intellectual property and ensuring costs are reduced 'equitably and proportionately'.

2026-08-13

Apple Proposes New Fee Structure

Apple formally submits its proposal for the fees it intends to charge for purchases made outside the App Store in the U.S., detailing tiered commissions of 15%, 10%, and 5%. Epic Games publicly announces its immediate opposition, labeling the proposed fees as excessive.

Frequently Asked Questions

The initial lawsuit established Apple's legal obligation to allow app developers to offer alternative payment methods outside the App Store. The current battle centers on *how much* Apple can charge for these 'off-App Store' purchases. Apple has proposed a tiered fee structure, which Epic Games contends is excessively high and undermines the court's original intent.

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