Apple loses court appeal in App Store case against Epic

A US federal appeals court has ruled against Apple in its ongoing legal battle with Epic Games over App Store policies.

The 9th US Circuit Court of Appeals said Apple violated a previous injunction by imposing a 27% commission on transactions made outside the App Store.

The court upheld a lower court’s contempt finding against Apple, and instructed the trial judge to reconsider what commission Apple can charge developers for using its intellectual property.

Epic Games accused Apple of blocking competition by restricting how developers direct users to alternative payment methods.

Apple typically takes a 15% to 30% commission on most in-app purchases.

The dispute between Apple and Epic Games has lasted for over five years.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Apple’s 27% off-store commission faces legal scrutiny, but precedents suggest minimal change

An appeals court told the trial judge to reconsider Apple’s 27% commission on external purchases (transactions completed outside the App Store) 1. The company already charges 26% for third‑party payments in South Korea 1 and 27% for Dutch dating apps 2. Both regimes face regulatory scrutiny.
Google’s user choice billing (a program that lets Android developers offer an alternative payment option) trims fees by 4 percentage points 3. Conversion friction and implementation work often erase the savings 3.
Under Apple’s Digital Markets Act (DMA) terms in the EU, commissions fall to 10–17% with a €0.50 Core Technology Fee per first annual install above 1 million (a per‑install platform fee) 3. There is no threshold for alternative app marketplaces (third‑party app stores) 3. Critics say scaled apps and new stores still face high costs 4.
Apple keeps shaping compliance to protect revenue 1 2 4. Tactics include separate app binaries (distinct builds) in some markets 2, audits and reporting on off‑store transactions 1, and fee structures that make alternatives hard to pencil out 4. A court change to the 27% rate may leave similar economics.

Payment processors and subscription platforms could see demand surge if commissions drop meaningfully

Consumer spending on non‑game apps across iOS and Google Play grew 28.2% year over year to $19.2 billion in Q4 2024 5. Productivity rose 46% 5, and finance apps neared 7.5 billion downloads in 2024 6. If Apple’s commission falls under 20%, developers in these fast‑growing groups will push external checkout.
TikTok generated about $1.9 billion in in‑app purchase revenue in Q4 2024 5. That spend could shift to other payment methods if economics improve.
Payment processors and subscription platforms with app‑to‑web billing (sending users to a website to complete purchase) 7 could win deals as developers steer users to web checkout. Streaming spend reached $11.9 billion in 2024, while social media hit $11.7 billion 6.