Apple Admits Its App Store Fees Are Too High

Forced to explain what reasonable App Store fees might look like, Apple admitted what we’ve all known for years. The fees are too high, far too high, and Apple would not incur any costs if developers could just directly bill their own customers. This makes the egregious 27 percent fees it’s been charging those developers all the more infuriating.

“Apple admitted that under the Ninth Circuit’s definition of ‘necessary costs’ they would charge 0 percent for purchases made via linkouts to the web,” Epic Games posted on Twitter/X.

But that’s just the tip of the admissions. Apple was also required to explain to the Court exactly what it thinks fair App Store fees would look like. And as it turns out, the most expensive of those fees is literally half of what it’s been charging developers for decades. The fee structure is so low, relative to Apple’s normal fees, that it could have simply adopted this years ago, and it would never have faced this renewed regulatory scrutiny in the first place.

Apple’s proposed App Store fees are:

• 15 percent for standard apps, which will still be subject to 30 percent in-app purchase (IAP) fees
• 10 percent for video, news, mini apps, and subscription renewals
• 5 percent for small business apps

“Based on expert analysis, it appears that large numbers of U.S. developers collectively accounting for the lion’s share of App Store revenue will be able to link out profitably at the proffered rates, resulting in substantial competitive pressure on IAP[s], a goal this Court has repeatedly emphasized,” an Apple statement explains. “And at these rates, Apple can recover at least some compensation for the value that its IP-protected tools, technologies, and services provide to developers, which the Court and the Ninth Circuit have also repeatedly acknowledged as legitimate and procompetitive.”

Apple had tried to prevent its admissions from becoming public while the U.S. Supreme Court considers a narrow part of its appeal of the additional injunctions imposed in the Epic v. Apple court case. But that request was tossed aside by Justice Elena Kagan, forcing Apple to weigh in on what it thinks is fair. If you consider this a negotiation, which it is, then you should view Apple’s proposed fee structure as the upper-end of what might be reasonably considered fair. And Epic Games has already stated that these fees are far too high.

“Epic believes these fees are far outside of the bounds of the Ninth Circuit’s guidance on permissible fees, and we have roughly 60 days to file our opposition supported by expert witnesses,” the company noted.

Epic Games founder and CEO Tim Sweeney also pointed out that yesterday, the day Apple was forced to make its admissions, marked the 6th anniversary of his company’s antitrust lawsuit against Apple. “Happy 6th birthday to Epic’s efforts to challenge the App Store monopoly,” he wrote. “August 13, 2020 – August 13, 2026.”