Apple has formally submitted its proposed fee structure for purchases made outside the App Store's in-app purchase system, following the Supreme Court's refusal to pause the lower-court proceedings in the long-running Epic Games v. Apple antitrust case. The submission marks the latest development in a dispute that has reshaped the rules around how app developers can direct users to alternative payment methods.

Apple's proposal sets the linked-out purchase commission at 15% for standard apps, which are subject to a 30% in-app purchase commission. The fee drops to 10% for apps in the Video Partner Program, the News Partner Program, the Mini Apps Partner Program, and subscription renewals. Developers enrolled in the Small Business Program would pay just 5%.

These proposed rates are significantly lower than the 27% commission Apple previously charged for off-App Store purchases, a figure that drew scrutiny from Judge Yvonne Gonzalez Rogers and ultimately led to a contempt finding against the company. The case dates back to 2020, when Epic Games sued Apple after Fortnite was removed from the App Store for introducing a direct payment system that bypassed Apple's IAP.

In 2021, Judge Gonzalez Rogers issued a permanent injunction requiring Apple to let developers include links or buttons that direct users to alternative purchasing methods. Apple was also barred from punishing developers who used outbound links to avoid paying the App Store commission. The injunction, however, was partially stayed on appeal, and the Ninth Circuit later reversed the outright ban on commissions for linked-out purchases.

The Ninth Circuit's ruling established that Apple may charge a commission for off-App Store purchases only if the fee is not effectively prohibitive. The case was then sent back to the District Court to determine what fee, if any, is appropriate under that standard. Apple has tried to pause those fee-setting proceedings while the Supreme Court considers whether the company should be held in contempt for charging the 27% commission in the interim. The Supreme Court declined to halt the proceedings, forcing Apple to submit its proffer.

In its filing, Apple argued that its proposed rates are supported by expert analysis. The company wrote that large numbers of U.S. developers 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. Apple also said the rates allow the company to recover compensation for the value its IP-protected tools, technologies, and services provide to developers.

Apple compared its proposed commissions to those charged by other Android app stores, including Google Play, Samsung Galaxy Store, and Amazon's Android App Marketplace. The company noted that Google Play charges linked-out rates of 20% standard, 15% program, and 10% subscription, and pointed out that Epic agreed to those rates in its own settlement with Google.

The company also reiterated that it still believes the rate-determination proceedings should be paused while the Supreme Court case is pending, and that it submitted the proposal only to comply with Judge Gonzalez Rogers's instructions. Apple highlighted the Ninth Circuit's observation that commissions for linked-out purchases are problematic only if they are effectively prohibitive, implying that its proposed rates are reasonable and procompetitive.

Epic Games responded quickly to the filing. In a statement on X, Epic's newsroom said that Apple admitted that under the Ninth Circuit's definition of 'necessary costs' they would charge 0% for purchases made via linkouts to the web. Epic noted that Apple proposed linkout fees of 15% for standard apps and 5% for Small Business Program apps, and said it believes the fees are still too high.

Epic's argument has long been that Apple's commission on outbound purchases is not justified by any costs Apple incurs when a user completes a transaction on the web. Apple, however, maintains that its commission reflects the value of the App Store ecosystem, including developer tools, app review, distribution, and security features. The District Court will now hear evidence from both sides on whether the proposed rates meet the Ninth Circuit's legal standard.

The case has significant implications for the broader app economy. If Judge Gonzalez Rogers approves Apple's proposed rates, developers will finally have clarity on how much they must pay when directing users to external payment systems. If she rejects the proposal, the court could set a lower fee or even order Apple to charge nothing for linked-out transactions.

Several analysts have noted that Apple's proposed fees are designed to preserve as much revenue as possible while staying within the bounds of the Ninth Circuit's ruling. The 15% standard rate is half of the 30% IAP commission, but it is still higher than the 12% commission that some app store critics have suggested would be appropriate. The 5% rate for small businesses could also be seen as an attempt to shield the program from criticism that Apple is penalising smaller developers.

Meanwhile, the Supreme Court is expected to decide in the coming months whether to take up Apple's appeal of the contempt finding. That appeal centres on whether Apple was allowed to charge 27% after the injunction was issued, and whether the lower court's interpretation of the injunction was correct. Apple's brief is due by September 14, and Epic will then have an opportunity to respond.

For now, the fee-setting proceedings will move forward. Epic will file its response to Apple's proffer, and Judge Gonzalez Rogers will likely schedule hearings to evaluate the expert evidence. The outcome could change how app stores around the world handle external payment links.

Apple's full remand proffer was made available as part of the public docket, and the company's expert reports are expected to play a central role in the upcoming hearings. The case remains one of the most closely watched antitrust disputes in the technology industry, with implications for both iOS and Android developers.

Source: 9to5Mac News