Apple vs Epic: App Store Commission Dispute Reaches Critical Point

Apple vs Epic: App Store Commission Dispute Reaches a Decisive Moment

The long-standing legal battle between Apple and Epic Games over App Store commissions has reached a critical juncture. The US Supreme Court has decided not to hear the appeal, leaving Apple with the task of modifying its App Store policy.

New App Store Commission Structure

Under the revised policy, developers are required to agree to regular audits and pay a percentage of their transactions to Apple. Developers generating annual revenue of over $1 million will be charged a commission of 27%, while most developers will pay a lower commission of 12%. Additionally, developers must provide Apple’s payment system as an option alongside their own.

Epic Games’ Response

Despite the changes, Epic Games’ CEO, Tim Sweeney, remains committed to fighting against these commissions. The recent decision echoes a similar context in which Apple reached an agreement in the Netherlands.

The App Store Commission Debate

The central point of contention surrounding App Store commissions has always been the amount Apple should charge. Initially targeting a 30% commission for the most successful developers, Apple currently charges most developers a 15% commission. However, it is important to note that many apps on the App Store are distributed for free.

Industry experts argue that commission fees for inventory and sales are common in retail stores, and numerous digital marketplaces also charge fees. For example, Epic’s own store charges a 12% commission for sales.

Unanswered Questions and Implications

After years of legal battles, the question of appropriate commission fees remains unresolved. Despite Epic Games’ imposition of a 12% commission on its own store, doubts persist regarding the sustainability of operating an online store at such commission levels, considering profitability.

Epic Games’ campaign against Apple’s commissions has sparked lawsuits and regulatory actions worldwide. One potential outcome is the support for app sideloading on Apple devices in the EU, although the long-term impact of such measures remains uncertain.

Apple vs the European Commission

Despite recent changes, Apple continues to insist on charging a 27% commission for digital products sold through developers’ own payment services and a 12% commission for those sold through Apple’s payment system. This stance has drawn criticism from individuals who have raised objections to Apple’s commission structure, leading to accusations of Apple acting in bad faith by Tim Sweeney.

A Broader Perspective

The debate over fair, reasonable, and sustainable commissions for digital retailers extends beyond Apple and Epic Games. The court’s ruling on this issue could establish globally agreed-upon limits on sales commissions, potentially impacting business profitability. However, political reluctance to address this issue due to lobbying influences may hinder progress.

Uncertain Future

As legal disputes continue and regulatory actions unfold, the future of App Store commissions and their impact on digital marketplaces remains uncertain. The implications of ongoing legal battles and regulatory measures have yet to be fully realized.

Source: Computerworld