Apple's Phil Schiller Initially Opposed 27% App Store Fee on External Purchases

Apple Fellow Phil Schiller testified in court on Monday that he initially opposed the 27% commission Apple now charges on purchases made outside the App Store, citing compliance risks and potential developer backlash (via AP News).

app store blue banner epic 1
Schiller, who oversees the App Store, said he had concerns that the fee would create an "antagonistic relationship" between Apple and developers, and worried about Apple becoming "some kind of collection agency" that might need to audit developers who didn't pay.

"I had great concerns about the collections of funds from developers," Schiller said during his three-hour testimony in the ongoing legal battle with Epic Games. He specifically worried about "the change in the role of the App Store to now an organization that needs to collect money from developers."

Despite his reservations, an Apple pricing committee that included CEO Tim Cook, former CFO Luca Maestri, and Apple's legal team ultimately decided to implement the commission structure.

The reduced 27% fee (down from Apple's standard 30%) was established after the 2021 Epic Games lawsuit ruling. Judge Yvonne Gonzalez Rogers rejected claims that Apple operated a monopoly. However, she ruled that Apple's anti-steering conduct was anti-competitive, and ordered the company to allow developers to link to alternative payment methods outside the App Store.

Apple complied by creating a system where developers can apply for a "StoreKit External Purchase Link Entitlement" to direct users to external payment options. However, Apple still demands a 27% commission on these transactions made within seven days of clicking the link. For developers in Apple's Small Business Program, the rate is 12% instead of the usual 15%.

Epic Games CEO Tim Sweeney previously criticized Apple's approach as "bad-faith" compliance with the court order, arguing the minimal commission reduction and other restrictions undermined the ruling's intent to foster more competition.

The current hearings are scheduled to continue until Wednesday, and are focused on determining whether Apple has violated the original court order. Judge Gonzalez Rogers has expressed frustration with Apple witnesses' hazy recollections about how they developed rules for the alternative payment system.

According to court documents, Apple extensively analyzed how the "less seamless experience" of external purchases would affect transaction completion rates, which helped the company work out when developers would likely return to using Apple's in-app purchase system.

The dispute between Apple and Epic dates back to 2020 with Epic seeking to overturn Apple's App Store rules requiring content purchases within iOS apps to go through Apple, which takes a 15% to 30% cut of the revenue.

Popular Stories

wwdc sans text feature

Apple Rumored to Announce New Product on February 19

Thursday February 5, 2026 12:22 pm PST by
Apple plans to announce the iPhone 17e on Thursday, February 19, according to Macwelt, the German equivalent of Macworld. The report, citing industry sources, is available in English on Macworld. Apple announced the iPhone 16e on Wednesday, February 19 last year, so the iPhone 17e would be unveiled exactly one year later if this rumor is accurate. It is quite uncommon for Apple to unveil...
Apple Logo Zoomed

Tim Cook Teases Plans for Apple's Upcoming 50th Anniversary

Thursday February 5, 2026 12:54 pm PST by
Apple turns 50 this year, and its CEO Tim Cook has promised to celebrate the milestone. The big day falls on April 1, 2026. "I've been unusually reflective lately about Apple because we have been working on what do we do to mark this moment," Cook told employees today, according to Bloomberg's Mark Gurman. "When you really stop and pause and think about the last 50 years, it makes your heart ...
Finder Siri Feature

Why Apple's iOS 26.4 Siri Upgrade Will Be Bigger Than Originally Promised

Friday February 6, 2026 3:06 pm PST by
In the iOS 26.4 update that's coming this spring, Apple will introduce a new version of Siri that's going to overhaul how we interact with the personal assistant and what it's able to do. The iOS 26.4 version of Siri won't work like ChatGPT or Claude, but it will rely on large language models (LLMs) and has been updated from the ground up. Upgraded Architecture The next-generation...
maxresdefault

Apple Shows Off a Key Reason to Upgrade to the iPhone 17

Saturday February 7, 2026 9:26 am PST by
Apple today shared an ad that shows how the upgraded Center Stage front camera on the latest iPhones improves the process of taking a group selfie. "Watch how the new front facing camera on iPhone 17 Pro takes group selfies that automatically expand and rotate as more people come into frame," says Apple. While the ad is focused on the iPhone 17 Pro and iPhone 17 Pro Max, the regular iPhone...
iOS 26

iOS 26.3 and iOS 26.4 Will Add These New Features to Your iPhone

Tuesday February 3, 2026 7:47 am PST by
While the iOS 26.3 Release Candidate is now available ahead of a public release, the first iOS 26.4 beta is likely still at least a week away. Following beta testing, iOS 26.4 will likely be released to the general public in March or April. Below, we have recapped known or rumored iOS 26.3 and iOS 26.4 features so far. iOS 26.3 iPhone to Android Transfer Tool iOS 26.3 makes it easier...

Top Rated Comments

wanha Avatar
13 months ago
Phil was right then and he is right now. Not that it matters in today's hyper greedy world.
Score: 24 Votes (Like | Disagree)
Kraszim Avatar
13 months ago
Sorry Apple but this business model is gone. I am paying all subs through providers websites, because they are just 30% cheaper. Let go of it. Don't fight your clients
Score: 21 Votes (Like | Disagree)
brofkand Avatar
13 months ago

Okay, but then why should Apple hosts your app on their store for free ? You seem to assume they have a moral obligation to offer you access to the Appstore while you’re entitled to direct all the payments for your app to your website . They don’t have any moral obligation to do that. I don’t know any software store that does.

Tim Sweeney’s own Epic Store doesn’t either. They take a 12% cut.
If they don't want to host apps, that's fine. Let me download it from the developer's website and install it myself.
Score: 20 Votes (Like | Disagree)
Velli Avatar
13 months ago
The balance of my admiration of Phil vs Tim has shifted immensely over the last few months.
Score: 18 Votes (Like | Disagree)
Kraszim Avatar
13 months ago

But why should Apple provide developers the whole AppStore infrastructure for free of they’re all going to direct the payment outside the Store ?

No software store provides their infrastructure for free, why should Apple be the only one ?
Because I paid full price for the phone and app store is one of the features of it. I would never pay as much for a phone if those pesky developers with their little apps weren't there. Besides if I can pay $10 on developers website, or $13 through Apple, then it isn't developer that pays this fee, its me. They get $10 both times.
Score: 11 Votes (Like | Disagree)
springsup Avatar
13 months ago
I’m just gonna say it - Phil Schiller would’ve been a better successor to Steve Jobs.

I know, he’s the marketing guy, and Steve always hated what happed to other Silicon Valley tech companies after letting marketing guys run the company.

But Phil was different. He understood Apple in a way that Tim Cook didn’t.
Score: 11 Votes (Like | Disagree)