Apple forced to eliminate commissions on external purchases after contempt ruling

The May 1st update to Apple's App Review Guidelines marks a pivotal shift in the company's relationship with app developers, eliminating restrictions on external payment options for the U.S. App Store. This change follows a contempt ruling against Apple for deliberately violating previous court injunctions regarding anti-competitive practices.

Just one day after a federal judge held Apple in civil contempt, the technology giant updated its developer guidelines with substantive changes to sections 3.1.1, 3.1.1(a), 3.1.3, and 3.1.3(a). These modifications remove Apple's ability to charge commissions on purchases made outside iOS apps, potentially ending what Epic Games CEO Tim Sweeney called "15-30% junk fees."

The court order, issued on April 30, 2025, by U.S. District Judge Yvonne Gonzalez Rogers, explicitly prohibits Apple from charging any commission on purchases made outside apps, restricting developers' design choices for external purchase links, requiring warning screens for external purchases, and excluding certain developers from accessing link options.

The ruling states the order took immediate effect, with the judge emphasizing "time is of the essence" and refusing to entertain requests for a stay. This urgency explains Apple's swift compliance, with updated guidelines published just 24 hours after the contempt finding.

Internal documents revealed through legal proceedings showed Apple executives chose the "most anticompetitive option" when designing their compliance program following the original 2021 injunction. According to court findings, Apple's 27% commission on off-app purchases, coupled with restrictive design requirements and high-friction user experiences, effectively prevented viable alternatives to Apple's In-App Purchase system.

Communications unveiled during February 2025 hearings showed Apple employees designing what they called a "scare screen" to deter users from completing external purchases. One employee wrote that "'external website' sounds scary, so execs will love it" when developing warning text for users attempting to make purchases outside the app.

The new guidelines now state: "On the United States storefront, there is no prohibition on an app including buttons, external links, or other calls to action, and no entitlement is required to do so." This represents a complete reversal from previous restrictions that required developers to obtain entitlements and still pay commissions to Apple.

The updated section 3.1.3 explicitly notes: "The prohibition on encouraging users to use a purchasing method other than in-app purchase does not apply on the United States storefront." Similarly, section 3.1.3(a) removes the requirement for External Link Account entitlement for apps on the U.S. storefront.

This legal battle began in August 2020 when Epic Games introduced direct payment options in its popular game Fortnite, circumventing Apple's payment system and the associated 30% commission. This led to Fortnite's removal from the App Store and sparked a broader legal challenge of Apple's business practices.

The original ruling in September 2021 included an injunction against Apple's anti-steering provisions, which was stayed pending appeal until January 2024. When implementing the injunction, Apple introduced new policies that the court has now determined were deliberately designed to maintain anticompetitive control over the app marketplace.

The contempt ruling is unusually forceful, even referring the matter to the U.S. Attorney for the Northern District of California for potential criminal contempt proceedings against Apple. The court specifically named Vice President of Finance Alex Roman, who allegedly lied under oath during testimony about Apple's analysis of costs developers would face when using alternative payment options.

Just days before the ruling, Epic CEO Tim Sweeney had announced on social media platform X that Epic would return Fortnite to the iOS App Store after more than four years of absence. In his post, Sweeney offered a "peace proposal," stating that if Apple extended the court's "friction-free, Apple-tax-free framework worldwide," Epic would "return Fortnite to the App Store worldwide and drop current and future litigation on the topic."

Spotify was also quick to respond to the ruling, announcing on May 2 that it had already submitted an app update that would allow U.S. customers to see pricing details on subscriptions, click links to purchase outside the app, seamlessly change subscriptions, use payment options beyond Apple's system, and access other buying opportunities that will directly benefit creators.

Impact on the Marketing Landscape

For digital marketers, this ruling represents a fundamental shift in mobile user acquisition and monetization strategies. Companies that previously factored Apple's 30% commission into their customer acquisition costs may now find iOS users significantly more profitable. This could lead to increased advertising spending on iOS platforms and reimagined app monetization strategies.

The elimination of the "Apple tax" on external purchases enables subscription businesses and transaction-based apps to operate more viably on iOS. Previously, many developers had to inflate their iOS prices by 30% to offset Apple's commission, creating price disparities between platforms. Now, developers can offer consistent pricing, potentially passing savings to consumers or reinvesting in content development.

Mobile marketers will need to rapidly adapt their user acquisition strategies and lifetime value calculations. The removal of Apple's commission on external purchases effectively reduces customer acquisition cost thresholds, making previously unprofitable user segments potentially valuable. This may drive a new wave of innovation in mobile business models and marketing approaches.

For app-based businesses, this change also presents operational challenges in implementing and optimizing external payment systems. Companies must now decide whether to maintain Apple's in-app purchasing system alongside their own payment options, creating a dual-track approach that may require extensive A/B testing and user experience research.

The ruling could also impact App Store Optimization (ASO) strategies. As developers gain more freedom in how they monetize their apps, the emphasis may shift from optimizing for in-app purchase conversion to driving external conversions, requiring new measurement frameworks and marketing tactics.

Industry experts suggest this ruling could spark similar challenges to other digital marketplaces that charge comparable commission rates, including console gaming platforms. However, those marketplaces may benefit from different competitive landscapes and legal considerations, including the fact that console manufacturers often sell hardware at a loss and recoup investments through software sales.

Throughout the proceedings, Apple maintained that its App Store policies were necessary to ensure security, privacy, and a seamless user experience. However, the court found these justifications pretextual, noting that Apple permits developers selling physical goods to include direct payment links without the same restrictions.

The court's findings pointed to Apple's modeling of "breakage" rates—the percentage of users who abandon purchases due to friction in the payment flow—with the express goal of identifying the tipping point where developers would lose more money using external options than by using Apple's system.

Timeline of Epic v. Apple Legal Battle

• August 13, 2020: Epic implements direct payment in Fortnite, leading to the game's removal from the App Store
• August 14, 2020: Epic files lawsuit against Apple
• September 10, 2021: Judge Gonzalez Rogers issues initial ruling and injunction against Apple's anti-steering provisions
• December 8, 2021: Ninth Circuit grants stay of injunction pending appeal
• April 24, 2023: Ninth Circuit affirms district court ruling on UCL violations and injunction
• January 16, 2024: Supreme Court declines review of case
• January 17, 2024: Ninth Circuit mandate issues, injunction takes effect
• January 16, 2024: Apple announces compliance plan including 27% commission on external purchases
• March 13, 2024: Epic files motion to enforce injunction and hold Apple in contempt
• May 8-31, 2024: Court holds first evidentiary hearing
• February 24-26, 2025: Court holds second evidentiary hearing
• April 30, 2025: Court finds Apple in civil contempt, issues immediate injunction prohibiting commissions on external purchases
• May 1, 2025: Apple updates App Store guidelines to comply with court ruling
• May 2, 2025: Spotify announces app update using new external purchase capabilities