Apple exec Phil Schiller testifies that he raised concerns over App Store commissions on web-based sales

Apple exec Phil Schiller testified about App Store commissions on external sales, with concerns over developer relationships and compliance.

: Phil Schiller from Apple testified in court regarding the company's App Store commission practices on purchases made outside the platform. Schiller initially opposed the 27% reduced fee, fearing it would strain developer relations and compliance. Despite this, a committee, including CEO Tim Cook, decided to proceed with the commission. This decision resulted in further legal challenges and accusations of bad-faith compliance from Epic Games.

Apple Fellow Phil Schiller expressed concerns in court about the App Store's 27% commission on purchases made outside the App Store, initially opposing the decision due to potential compliance risks and its effect on developer relationships. The standard 30% commission was reduced due to a legal ruling between Apple and Epic Games, leading to Schiller's worries over the App Store becoming a collection agency and needing to audit developers' payments.

A committee, which included Apple's CEO Tim Cook, decided to move forward with the commission strategy, setting a 3% reduction while aiming to maintain developer participation in Apple's Small Business Program. In discussing this strategy, the committee considered customer behavior and transaction abandonment using non-IAP methods, which informed their decision to extend the commission's effect window to seven days.

Documents discussed in court revealed strong internal debate at Apple on how to approach these commissions. The company looked into various options, including placing warnings for users when navigating away from Apple’s platform, subtly indicating potential risks with third-party transactions. These measures were scrutinized under allegations of undermining a district court order, leading to ongoing legal challenges.

App StoreCommissionsLegal Ruling