Recently, Apple’s App Store has been in the news for anti-steering practices. In both the US and EU, recent legal actions against Apple mean developers can now freely link to external payment methods, bypassing Apple payments and the App Store’s 30% commission. While Apple plans to appeal, it seems more likely that the rulings will stick.
What does this mean for Canadian developers? Nothing yet – but it may be the beginning of a pattern of new laws, so it’s a good idea to keep an eye on these developments if you’re thinking of building an app with in-app purchases. Below, we’ll cover the timeline of the story so far, and share some predictions from the Vertical Motion team about what the future may hold for Canadian developers.
A brief timeline of the Epic vs. Apple lawsuit in the US
In the US, the scrutiny against the App Store’s fees started with a lawsuit brought by Epic Games in 2020. The lawsuit challenged Apple’s refusal to allow links to external payments in Fortnite, a free game that relies on in-game purchases to generate revenue.
Here’s how it went down:
2020
Epic games made changes in Fortnite to bypass Apple payments (and the 30% commission), and Apple blocked Fortnite from the App Store in response. Epic filed a lawsuit for Apple’s anti-steering practices, while Apple filed a countersuit for breach of contract.
2021
Judge Yvonne Gonzalez Rogers ruled that Apple could keep in-app payments restricted to Apple payment systems, but could no longer prevent developers from linking to external sites.
2024
Apple and Epic both appealed the ruling, but were denied. Apple did allow developers to link to external payments, but charged a 27% commission on those payments and displayed pop-ups with warnings about the danger of external links. Epic Games filed a contempt order in protest of the new App Store practices.
2025
Gonzalez Rogers ruled that Apple violated their court order, and prevented Apple from charging commission on external payments, showing any “scare screens” to deter users from making off-app purchases, or otherwise restricting the links.
Epic Games CEO Tim Sweeney told the press, “It forces Apple to compete with other payment services rather than blocking them, and this is what we wanted all along.” However, he wasn’t as happy with Apple’s recent attempt to comply with the Digital Markets Act in the EU, which he described as “hot garbage” and “a devious new instance of Malicious Compliance.”
Apple’s response to the EU’s Digital Markets Act
The EU’s Digital Markets Act focuses on large tech “gatekeepers” with the power to control markets. Image source: Statista
In April, it fined Apple €500 million for refusing to allow developers to link to external payment options in apps, with even more fines down the road if Apple refused to act.
Apple’s response was to allow links to alternative payments while also creating a more complex fee structure for developers.
TechCrunch reports that after an initial acquisition fee of 2%, developers will have to choose between a 5% “Tier 1” fee and a 13% “Tier 2” fee – in addition to a “Core Technology Commission” fee of 5% on external payment links. While Tier 1 offers developers the basics, anyone who wants marketing, performance metrics, or developer marketing tools will need to pay the Tier 2 fee.
In both cases, it’s clear that Apple isn’t willing to go down without a fight, meaning there may be more bumps in the road ahead for other legislators who follow in these footsteps.
How the ruling is already impacting app developers
The effect that the updates will have on app monetization strategies will likely vary. Large businesses like Spotify are adjusting their app interfaces to link out to their own payment systems, and lowering prices to match off-app fees.
For smaller businesses, the situation isn’t so black and white. Small developers were already paying lower commissions of 15%, and the shift to external payments requires careful consideration of payment flows, UX design, compliance, and ongoing app maintenance.
Since Apple will appeal the ruling, developers in the US and EU who add external payment links will need to keep an eye on how the situation plays out. Although it seems unlikely, a successful appeal would mean that developers would need to remove their payment links from their apps. It’s a good example of how regulatory changes can create tech debt that puts apps at risk of noncompliance with app store rules.
What will the App Store’s future hold for Canadian developers?
In Australia, the government is already eyeing a proposal to “designate” Apple in a similar way as the EU has to prevent it from dominating markets – which could allow them to make similar rulings about App Store payments and more. Will Canada follow suit?
At Vertical Motion, our development team has been watching these developments closely. Here’s what our President Jason Jones and Backend Developer Anthony Tibbs had to say about the likelihood of similar legislation in Canada:
App Store sales are an increasing chunk of Apple’s overall revenue, while product sales decline. Image source: Yahoo Finance
Will the new legislation change the app store as we know it?
Bloomberg goes a step farther to predict that the App Store will eventually face the same fate as iTunes, waning in popularity as another incumbent becomes the market leader. Part of that change may already be under way in the EU, as its Digital Markets Act required Apple to let users “sideload” apps from other marketplaces onto their phones in 2024. Similar legislation is already in the works in both Australia and the UK:
Notably, Epic Games already has their own app marketplace in the EU and on Android phones – and marketplaces like Apotide and AltStore PAL are gaining momentum. The apps on these stores must be notarized by Apple for basic functionality and security, but the marketplaces can have their own policies and standards for developers. If a future of more competitive app marketplaces takes off, that could give developers more flexibility, but would also require some degree of caution around choosing the right marketplace.
In conclusion
Keep your app in top shape for whatever comes next
Our mobile app development team has seen many changes to the app store over the years, but the new regulatory environment could speed up the rate at which apps evolve. Although this change won’t affect Canadians yet, it points to some exciting potential developments in the future.
To keep your app in top shape for what’s next, we recommend that you:
- Keep your app well-maintained so tech debt doesn’t slow down new updates
- Maintain proper version control to stay prepared for rollbacks
- Test continuously to ensure new features align with what your user base wants
At Vertical Motion, we help businesses create and maintain scalable, functional apps built for business growth – and for market stability even when the tides change. Want to bring your app idea to life? Get in touch to learn more.
Vertical Motion is a trusted Canadian software development and entrepreneur assistance company that has supported the global efforts of startups, non-profits, B2B, and B2C businesses since 2006. With headquarters in Calgary and Kelowna, and team members coast to coast, Vertical Motion is recognized as an award-winning leader in the technology industry. Our team of executive advisors, project managers, software developers, business analysts, marketing specialists, and graphic designers have extensive experience in several industries including — Energy, Finance, Blockchain, Real Estate, Health Care, Clean Technology, Clothing & Apparel, Sports & Recreation, Software as a Service (SaaS), and Augmented & Virtual Reality (AR/VR).
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