M.G. Siegler • #app store • Aug 13, 2026

Apple's App Store Fees Live to Die Another Day

...perhaps today. Almost certainly soon.

🔗 App Store Proceeding Halted by Supreme Court for Now • Bloomberg

Apple's App Store fees are hanging on for dear life:

Apple Inc. won a one-day reprieve from the Supreme Court Wednesday as Justice Elena Kagan paused proceedings before a California trial court in the iPhone maker’s long-running antitrust feud with Fortnite-maker Epic Games Inc.

The administrative stay issued by Kagan is designed to give the high court more time to consider Apple’s request for a longer-term stop to additional lower court action in the case. Absent the Supreme Court’s order, Apple would have needed to make a filing with the US District Court for the Northern District of California by Wednesday afternoon. Kagan paused proceedings until 5:00 p.m. Washington time Thursday.

In other words, Apple was going to have to submit a proposal to the California court for what they think a "fair" App Store cut should be – something between 0% and 27% – with evidence to back up that proposal. While they wouldn't have been forced to implement that fee yesterday, it is a massive component of the on-going legal challenge because it will essentially put the wheels in motion to bring about a lower fee. Potentially a much lower fee.

Apple, of course, doesn't want to lower the fee. They didn't want to lower it from their standard 30% cut, but their sole loss in "winning" the Epic court case ensured the end of that. It meant developers could link out to the web to handle payments outside of the App Store rails, which Apple reluctantly allowed alongside a 27% fee.

This fee, famously, pissed off US District Judge Yvonne Gonzalez Rogers. Because it was pretty clear that 27% was backed into by Apple to not only keep the fee structure intact, but also to keep the entire model intact. Because a 27% fee was likely a worse deal for many developers who chose to use it (because they'd have to pay the processing fees for anyone they choose to handle the payments on the web, which are usually just above 3% – making the total cut paid above 30%).

Anyway, yeah Judge Gonzalez Rogers found Apple's "remedy" so insulting that she asked for Apple to be held in criminal contempt of court. And she ordered Apple to stop charging fees for web-based payments. Apple has kept trying – and failing – to reverse all of this. The Ninth Circuit upheld the contempt finding but also said Apple should be allowed to charge something for their App Store fees (even when processed through the web), just not 27%.

Apple tried to freeze the entire thing while they appealed to the Supreme Court – and the Supreme Court denied the freeze. But they didn't deny hearing the case – yet. That's why they're pausing the proceedings for now (after Judge Gonzalez Rogers denied the same request), while they weigh Apple's appeal. But before they do that, they're basically likely to decide today – again, it was just a 24-hour delay – whether they should grant a longer stay. Presumably if the court thinks they're unlikely to hear Apple's appeal, they may not grant that longer stay. Or if they think Apple filing their number won't harm their business, they'll let it proceed. But Apple will argue that if the longer stay isn't granted, it will cause major harm to their business because again, it will effectively end the App Store cut as we know it.

So yeah, it's a big deal.

Especially because in their most recent earnings report a couple weeks ago, Apple noted that their Services growth was weaker than expected in part due to the pressure the App Store model is under. Other countries have already taken various actions to change Apple's fee structure – and even force them to allow for third-party app stores. But the US is obviously Apple's most important market.

And beyond all of the above, they're also under growing pressure because Google got more fully owned by Epic in a separate trial around the Play Store. They lost that case so badly that they ended up cutting a deal with Epic to end their own 70/30 split, amongst other things.

All of this is why I've been predicting/waiting for Apple to change their tune on the App Store and "proactively" change some of the rules, including, most notably, the standard 70/30 split. Yes, they've tweaked it over time due to various developer backlash (and political/governmental pressure), but it seems well past the time to rip the Band-Aid off – as it's in the process of being taken off ever-so-slowly by courts around the world. And, as everyone knows, that's far more painful.

And yet, Apple has thus far refused to budge. Presumably they're holding out for the hope that the US Supreme Court hears their case and determines the 27% shenanigans didn't warrant a contempt ruling (as well as that their one loss against Epic shouldn't dictate changes for every developer across the board). But regardless, the whole thing is so clearly hanging on by a thread.

My hope is that they're now simply waiting for John Ternus to formally be put in place and as one of his first acts, he changes the App Store rules. It would send a great signal to the market and to Apple's developer community that Ternus is his own man, ready to make hard calls and make changes as needed. The precedent here would be Satya Nadella coming into place as Microsoft's CEO and immediately announcing the Office suite for iPad.

Am I asking too much? Probably. It's Apple. They're nothing if not stubborn. But again, the writing is so clearly on the wall here... Apple and Ternus can turn this from a major PR headache into a major PR win!

But they also may not have enough time to do that right now as again, there's a new deadline today! If the Supreme Court doesn't issue that longer stay, Apple will have to submit their proposal for a "fair" fee – again, presumably less than 27% lest they risk pissing off the court even more! – and that in turn will lead politicians all around the country and world to wonder why if the fair fee is 'X%' why they've been charging 30%?

The answer is actually and humorously because that's what Nintendo charged third party game makers to help them make video game cartridges for the NES back in the day. But no one wants to admit that, so instead it's 30% because that's the industry norm, even if it was arbitrarily set by Steve Jobs because it was working for iTunes, again, because it had worked for gaming way back when. Jobs also, of course, famously said he didn't expect the App Store to be a big money maker and instead wanted the fees to simply cover the costs of running the service.

And yet here we are, nearly 20 years later, with the App Store raking in billions in profits and powering Apple's second most-important business in Services. That's obviously what this is all about. But it's also obviously about to change...

Update August 14, 2026: The Supreme Court decided against issuing a further delay and as such, Apple had to file their proposal yesterday. There's quite a bit in here...

First and foremost, Apple proposed cutting the 30% cut they take to 15% if transactions are done on the web. You'll note that this is quite a bit less than Apple's previous proposal of 27%, which got them into trouble. It's obviously halfway between the current 0% rate that Judge Gonzalez Rogers put in place and the 30% standard. That 15% also gets cut further depending on the category of app. Here's the proposal:

• 15% for standard apps, which are subject to a 30% in-app purchase (“IAP”) commission;

• 10% for the Video Partner Program (“VPP”), the News Partner Program (“NPP”), the Mini Apps Partner Program (“MPP”), and subscription renewals; and

• 5% for Small Business Program apps.

Unsurprisingly, Epic has already pushed back against the 15%, noting that Apple themselves found that their "necessary costs" to allow app makers to route payments through the web "would be essentially zero". Apple was also forced to issue that finding and yeah, it doesn't look great!

But Apple's stance on why they need to charge 15% turns to the notion that if they accepted less of a cut, it would effectively kill their IAP business, and as such, the App Store business, as it would drive pretty much all developers to use the web instead.

Given that, it's probably not surprising that Apple is also now seeking settlement talks(!) with Epic over the situation. In fact, Apple tried to talk to them before they were forced to issue these findings and Epic said no! Now you see why Apple's strategy here was perhaps flawed... Epic, of course, did end up settling with Google, undoubtedly because they weren't nearly as hostile as Apple has been.

Epic really, really does not like Apple as a result of all of this and clearly has been angling – for years now – to make them pay, perhaps quite literally.

Apple is now trying to get the court to force Epic into settlement talks. And if that tactic doesn't work, Apple's proposal will go back in front of Judge Gonzalez Rogers, likely before the end of the year, to determine what the actual cut should be. Presumably she would decide on something between 0% and 15% now, but probably closer to 0% given that was her initial amount, but taking into account the 9th Circuit's ruling that Apple should be entitled to something.

Apple is in a very dangerous spot here. Yes, this is only for web payments, but still, to Apple's point, if that cut is low enough, it could destroy IAP and thus, the App Store as we know it. And that, in turn, would destroy Apple's entire Services business as we know it. Apple's second-biggest business! The one with the most steady growth!

So yeah, they need Epic to settle. Can a CEO change at Apple somehow make that happen? Might Tim Sweeney need to see other concessions? Perhaps new leadership for the App Store itself? This isn't game over, but it's close...

Update August 17, 2026: And now Epic has responded to Apple's push for the judge to force settlement talks...

Epic has now responded to Apple’s motion, stating that although the company “has been, and remains today, willing to entertain any direct approach from Apple with a serious settlement proposal that would introduce competition and benefit all developers,” it “does not believe the prospects of such settlement would be meaningfully advanced through referral to a settlement conference at this juncture.”

At first that sounds promising, but the hold up – and why Epic "does not believe the prospects" – may be in the fact that they're clearly holding out for Apple to make changes for "all developers" – i.e. not just a one-off deal with Epic. That has long been Epic's angle here. The ball remains in Judge Gonzalez Rogers' court...

Update August 18, 2026: Might there be a new wrinkle here in Apple's agreement in the EU?..

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Previously, on Spyglass...