Acquisition

Supreme Court ruling on App Store pricing

Rajeev Raman

January 17, 2024

In a landmark decision on January 16, 2024, the U.S. Supreme Court rejected Apple's appeal in a case stemming from a lawsuit by Epic Games. Bottom line, Apple can no longer stop app developers from linking out to their sites for purchase actions. Within minutes, Apple sent an email to all developers confirming this. Woohoo?

Let me back up a bit with a refresher. Back in 2020, Epic Games challenged Apple's requirement that all in-app purchases on iOS devices must be made through Apple's own payment system, subject to a 15-30% commission fee. Epic argued that this requirement stifled competition and inflated prices for consumers. The Supreme Court sided with Epic on a key point: that Apple's anti-steering provisions, which prohibit developers from informing users about alternative payment methods within their apps, violate California's Unfair Competition Law. Apple appealed this decision to the Supreme Court which then refused to hear the appeal effectively sealing the deal.

Given the alacrity with which Apple emailed developers, many suspected that Apple managed to find the grey between the black and the white here. And it looks like they did.

If you read the fine print in the updated developer agreement, you can see why.  If you link out to your site, that link is effectively a referral link and any conversions within 7 days will incur a 27% commission to Apple subject to bi-weekly reporting requirements and audits. So yes you can sell on your site but you still have to pay me. The Internet is full of referral links with commission rates ranging from 5% to 50%, nice flex Apple 💪.

More appeals? Probably. More features from Apple to justify App Store billing? Definitely. Want to have your cake and eat it too? Book a meeting!

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