Apple Submits Off-App Store Commission Proposal

Apple has submitted its formal proposal to the U.S. District Court for the Northern District of California, outlining the commission rates it wants to charge developers for purchases made outside the App Store's in-app purchase system. The submission, made on August 13, 2026, comes after the Supreme Court denied Apple's request to pause the lower-court proceedings while it reviews whether Apple should be held in contempt for charging a 27% commission on off-App Store purchases.

The case is the latest chapter in the long-running legal battle between Apple and Epic Games. In 2021, Judge Yvonne Gonzalez Rogers issued an injunction requiring Apple to allow developers to direct users to alternative payment methods. That injunction was later modified by the Ninth Circuit, which overturned the lower court's outright ban on commissions for linked-out purchases, stating that such commissions are problematic only if they are effectively prohibitive. The current proceedings are intended to determine what fee, if any, Apple may charge for these linked-out transactions.

Background of the Epic v. Apple Battle

The dispute began in August 2020, when Epic Games intentionally violated App Store rules by adding a direct payment mechanism to Fortnite, bypassing Apple's in-app purchase system. Apple removed Fortnite from the App Store, and Epic quickly filed a lawsuit alleging anticompetitive conduct. The initial trial, held in 2021, produced a mixed ruling. Judge Gonzalez Rogers found in Apple's favor on nine of ten counts, but also concluded that Apple's anti-steering rules violated California's Unfair Competition Law. She issued an injunction forcing Apple to let developers tell users about cheaper payment options outside the App Store.

That injunction did not immediately settle the matter. Apple appealed, and the Ninth Circuit narrowed the injunction. The appellate court reversed the outright ban on commissions for linked-out purchases, saying such fees could be legitimate unless they made it impractical for developers to offer external payment options. The Ninth Circuit then sent the case back to the District Court to determine a fair commission rate. Meanwhile, Apple introduced a 27% commission for off-App Store purchases, representing its standard 30% commission minus a 3% credit for payment processing. Epic argued that this fee effectively blocked the benefit of linking out and asked the court to hold Apple in contempt. The Supreme Court is now reviewing that contempt question, but declined to pause the rate-setting proceedings.

Why the Supreme Court Denied Apple's Request

Apple had argued that the Supreme Court's review of the contempt issue could affect the outcome of the fee-setting proceedings, and therefore the lower-court proceedings should be put on hold. The company asked the Court to pause the District Court case while it considered whether Apple can be held in contempt for charging the 27% commission. However, the Supreme Court denied the request, allowing the District Court to move forward with the fee-setting process. Apple has maintained that it submitted its proposal only to comply with Judge Gonzalez Rogers's instructions, and that it still believes the rate-determination proceedings should be paused while its case is pending before the Supreme Court.

The Proposed Commission Structure

Apple's proposal calls for a tiered commission structure based on the type of app and the developer's program status. Specifically, Apple proposes:

• 15% for standard apps, which are subject to the standard 30% in-app purchase commission;
• 10% for the Video Partner Program, the News Partner Program, the Mini Apps Partner Program, and subscription renewals; and
• 5% for apps enrolled in the Small Business Program.

The proposed rates are considerably lower than the 27% commission Apple has been charging for off-App Store purchases since the injunction was issued. Apple has argued that the new structure reflects the value of its intellectual property, tools, technologies, and services, while still allowing developers to benefit from linking out to alternative payment methods.

Apple's Justification and Comparisons

In its filing, Apple said that "fact and expert evidence with respect to these proposed commission rates are concurrently submitted." The company argued that, based on expert analysis, a large number of U.S. developers accounting for the majority of App Store revenue would be able to link out profitably at the proposed rates. Apple said this would create substantial competitive pressure on its in-app purchase system, a goal the court has repeatedly emphasized. At the same time, Apple argued that the rates would allow the company to recover some compensation for the value its IP-protected tools, technologies, and services provide to developers.

Apple also compared its proposed rates with those of other app stores that compete with the App Store, including Google Play, Samsung Galaxy Store, and Amazon's Android App Marketplace. The company noted that Google Play charges linked-out rates of 20% for standard apps, 15% for program participants, and 10% for subscriptions. Apple pointed out that Epic agreed to those rates in its own agreements with Google, suggesting that Apple's proposed 15% standard rate is within a reasonable range when compared with the broader app marketplace.

The company also cited the Ninth Circuit's ruling that commissions on linked-out purchases are not inherently anticompetitive, but only become problematic if they effectively prohibit developers from steering users to alternative payment methods. Apple argued that its proposed rates are designed to avoid such a prohibition, giving developers meaningful financial reasons to link out while still providing Apple with compensation for its platform investments.

Epic's Response

Epic Games responded to Apple's filing shortly after it was submitted. In a post on X, Epic's Newsroom account said that Apple's filing included an admission that under the Ninth Circuit's definition of "necessary costs," Apple would charge 0% for purchases made via linkouts to the web. Epic noted that Apple proposed 15% for standard apps and 5% for Small Business Program apps, but argued that the proposed fees remain inconsistent with the court's guidance and with Apple's own economic analysis.

Epic has long contended that any commission on purchases processed outside Apple's payment system is unjustified, because Apple does not incur the same payment processing costs and because the App Store's anti-steering rules have historically limited competition. The company is expected to file a formal response in the coming weeks, and the District Court will then determine whether Apple's proposed rates are appropriate under the legal framework established by the Ninth Circuit. Epic has also criticized the complexity of Apple's tiered structure, arguing that it creates confusion for developers and may still discourage external payments.

Potential Implications for Developers and Consumers

The outcome of this case could have significant implications for the App Store ecosystem. If Apple's proposed rates are approved, developers who choose to link out to alternative payment methods would pay a lower commission on those transactions, potentially giving them more incentive to direct users to the web. For standard apps, the proposed 15% rate is half the standard 30% commission, while Small Business Program apps would pay just 5%, down from the 15% they currently pay on in-app purchases.

For consumers, the shift could mean more options for subscription sign-ups and purchases, and possibly lower prices if developers pass on some of the savings. However, it could also create fragmentation, as users may have to navigate between in-app purchases and external web pages. The legal battle has already led to changes in how Apple handles external payments, and a ruling on these proposed rates would set a precedent for app store policies not only in the U.S. but potentially in other jurisdictions as well. Regulators in Europe and elsewhere are also examining app store commission structures, so the U.S. decision could influence global enforcement actions.

What Happens Next

Epic now has an opportunity to respond to Apple's proffer, and the District Court will likely hold hearings to evaluate the evidence and expert testimony presented by both sides. Meanwhile, Apple is expected to file its brief with the Supreme Court by September 14, asking the Court to review the contempt finding related to the 27% commission. The Supreme Court's decision in that matter could influence the ongoing fee-setting proceedings, even though the Court declined to pause them.

The coming weeks will be critical, as both companies prepare their arguments and the court moves toward a decision on what constitutes a fair commission for off-App Store purchases. Developers and observers will be watching closely to see whether Apple's proposed tiers hold up under scrutiny, and whether any adjustments are made before the court issues its final ruling.

Source: 9to5Mac News