Product1 publisher3 min readPublished
Apple defends its 27% commission on outside-app checkout in its Supreme Court merits brief
The justices agreed to review the contempt finding that followed Apple's compliance plan, the plan that allowed outside payment links and charged up to 27% on purchases made through them.
The Product Desk · Product desk
What happened
- Apple has filed its opening merits brief with the U.S. Supreme Court, asking the justices to overturn the contempt ruling in the case Epic Games brought against it in 2020.
- The contempt finding traces back to the one claim Apple lost in the original suit, where the court held that Apple's anti-steering rules violated California's Unfair Competition Law.
- The resulting permanent injunction bars Apple from prohibiting developers from putting buttons, external links or other calls to action in their apps that point customers to purchasing mechanisms besides In-App Purchasing.
- The brief argues contempt requires clear notice of what is prohibited, and calls the Ninth Circuit an outlier for allowing parties to be held in contempt for violating an injunction's spirit.
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Why it matters
- constraint Review is confined to the contempt finding, so the right to place an outside checkout link inside an iOS app survives the case in either direction and only the commission on it is unsettled.
- decision Keeping or building web checkout is now a finance sign-off with two possible take rates, and whoever approves the price this quarter will be defending it after the ruling lands.
- exposure Developers who moved billing onto their own stack under the current rules absorb the switching cost themselves if a commission on external purchases comes back.
- precedent If the Court adopts Apple's notice standard, parties under any injunction gain room to do what the order did not spell out, and the party seeking enforcement has to go back and ask for a clarification first.
A developer who shipped a "Subscribe on our website" button into an iOS app did it under two rulings, and Apple's opening merits brief asks the Supreme Court to undo one of them [1]. Review does not touch the link itself, only what Apple may charge on purchases made through it [18].
Apple's compliance plan allowed the links and imposed a commission of up to 27% on purchases made through them [7]. On $100 routed to a web checkout, that is up to $27 back to Apple [16]. Epic challenged the plan, the district court agreed with Epic, and Apple was held in contempt for violating the injunction [8]. The brief notes that when Apple "filed its notice of compliance on January 16, 2024, the district court did not raise any immediate concern" [9].
The case Apple brings is about notice. Civil contempt "may not be imposed unless an order provides clear notice that the conduct at issue is proscribed," Apple argues [11]. The brief cites earlier decisions for the rule that "a party may not be held in contempt unless an order leaves no fair ground of doubt that it prohibits the particular conduct at issue" [12]. It also says "Needless to say, silence is not enough," pointing to a Second Circuit ruling that vacated a contempt order resting on conduct the underlying order was "silent" about [13].
According to Apple's brief, Epic acknowledged that the injunction "did not explicitly prohibit" a commission on purchases made outside the App Store. Epic argued instead that the new commission violated the injunction's "spirit," and the district court accepted that reading [10]. Apple calls the Ninth Circuit an outlier for allowing contempt on that basis [14]. The filing draws its line this way. "Courts have the power to modify or clarify injunctions on a going-forward basis to address new or changed circumstances, but the severe remedy of contempt is limited to situations in which a party violates the unambiguous terms of an order" [15].
For a team deciding this quarter whether to keep or build outside checkout, there is a workable exercise. Run every paid SKU at two Apple take rates on web purchases, zero and 27%, and see which ones clear their margin at both [7][16]. SKUs that clear at both can ship on their own merits. SKUs that clear only at zero are priced on the assumption that the contempt finding stands.
Reversibility is the second column of that table. Pulling a link out of an app is a build. Cutting a subscription price in public and moving existing customers onto your own billing stack do not come back for the cost of a build. The switching work lands on the developer, not on Apple.
Since the contempt finding, Apple has argued that nothing in the original injunction barred it from charging a commission, and the Supreme Court has agreed to review that finding [1][2].
What to watch
- Epic's response brief, and whether it argues the injunction's terms already covered commissions instead of resting on its spirit.
- Any move by Apple to charge a commission on external-link purchases while the case is pending.
- A date for oral argument: the 9to5Mac report does not include one.