Sidebar Sidebar
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.

Y Combinator Files Brief Supporting Epic Games, Says App Store Fees Stifle Startups

MacRumors

MacRumors

macrumors bot
Original poster
Apr 12, 2001
68,928
39,914


Startup accelerator and venture capital firm Y Combinator (YC) today filed an amicus brief supporting Epic Games in Epic's continued legal fight with Apple. Y Combinator says that Apple's "anti-steering restraints" have long inhibited the growth and development of technology companies that monetize goods and services through apps.

app-store-blue-banner-epic-1.jpg

The company calls on the court to deny Apple's appeal and uphold the order that required Apple to change its App Store linking rules in the United States.

Back in April, Apple was found to be violating a 2021 injunction that required it to let developers direct customers to third-party purchase options on the web using in-app links. Apple had implemented a system for developers to link to external websites in their apps, but it charged an up to 27 percent fee to do so.

Apple was found to be in "willful violation" of the anti-steering injunction, and it was ordered to allow developers to freely link to purchase options outside of the App Store with no fees or restrictions on link format. Apple implemented those changes, but also filed an appeal, so there is potential for the decision to be walked back. Epic Games and now Y Combinator are aiming to prevent Apple from being able to revert to its old App Store rules around linking.

Y Combinator says that it has "long been hesitant" to support app-based businesses subject to "the Apple Tax" because they were poor investments.
A 30% revenue share can easily be the difference between a company that can afford to scale, hire new employees, and reinvest in its product, and one that is perpetually struggling to stay afloat. Understood in this light, the 30% Apple Tax protected from erosion by Apple's anti-steering restraints is not merely a cost of doing business, it is a profound and often insurmountable barrier to entry that stifles competition and innovation at its source.
Click to expand...
The enforcement order that's currently in place has already created renewed investor interest in app-based business models that were previously not feasible, according to Y Combinator. The company believes that Apple adds minimal value for the fees that it collects.

Y Combinator suggests that the court end Apple's anti-steering restraints permanently to promote innovation and to allow tech startups to freely compete.

​


Article Link: Y Combinator Files Brief Supporting Epic Games, Says App Store Fees Stifle Startups
 
Article Link
https://www.macrumors.com/2025/08/21/y-combinator-epic-games-amicus-brief/
Options:
- Build a web site.
- Build a progressive web app.
- Build an iOS app that charges 30% more in app versus the web.
- Don't build for iOS at all and just target the 70% marketshare that is Android.
- Build your own phone with your own OS.

plenty of options. it's not hard, Garry Tan + Tim Sweeney.
 
  • Like
  • Disagree
  • Love
Reactions: jinnj, michaelsviews, MacUserFella and 19 others
So Apple is responsible for all the companies that couldn't succeed because Apple has the nerve to want to make money off their own service? Wtf kind of logic is that? And how is wanting a cut any different from a VC? Except while VC just offers money, Apple spendings billions developing platforms, promoting devices, building a customer base for developers, and maintaining their infrastructure. It's a business, it's not a charity. Business have costs, and profit margins are part of it. Let Y build their own free platform to foster and accelerate all the companies Apple supposedly stopped in the first place.
 
  • Like
Reactions: jinnj, sleestak, SFjohn and 3 others
chelsel said:
It's actually 15% for exposure to the App Store, payment processing, refund handling and some light application quality control and testing. It's actually a bargain. The percentage only goes up after your first million. At which point I don't consider you a "startup".
Click to expand...

+ all the money saved from using Apple Maps vs paying tens of thousands of dollars/month to Google Maps
 
  • Like
Reactions: jinnj
chelsel said:
It's actually 15% for exposure to the App Store, payment processing, refund handling and some light application quality control and testing. It's actually a bargain. The percentage only goes up after your first million. At which point I don't consider you a "startup".
Click to expand...
Series A funding for startups in the US is around $20M on average. If they don’t manage to reach more than $1M of annual revenue in that phase, they are likely to fail. Series A is usually the most difficult time for a startup, working against the clock of the funding runway.

(Not that I’m personally a fan of that VC funding startup culture.)
 
  • Like
Reactions: businesscats and applefan8254
Not only do you have to buy a Mac just to develop anything for iPhone, iPad, or Mac, but that still isn’t enough for Apple, they also demand 30% of your profits, which is more than most multi-million–dollar investors would ever ask for!

I guess I finally understand why it’s called Apple with an apple logo, just like it wasn’t enough for Eve, it’s never enough for Apple either. Pure greed!
 
  • Disagree
  • Like
  • Haha
Reactions: businesscats, _Mitchan1999, KENESS and 2 others
q64ceo said:
It's not stifling to charge a 30% fee for hosting the app.

What's stifling is not having a choice in where it can be obtained, giving the developer and purchaser a better deal in some cases.

Imagine if you could only buy Coca Cola at Walmart...
Click to expand...
Can’t buy Sam’s Cola at Target.
 
Freedomeey said:
Not only do you have to buy a Mac just to develop anything for iPhone, iPad, or Mac, but that still isn’t enough for Apple, they also demand 30% of your profits, which is more than most multi-million–dollar investors would ever ask for!

I guess I finally understand why it’s called Apple with an apple logo, just like it wasn’t enough for Eve, it’s never enough for Apple either. Pure greed!
Click to expand...
So do you think I you should be able to have an app on the platform for free
 
Freedomeey said:
Not only do you have to buy a Mac just to develop anything for iPhone, iPad, or Mac, but that still isn’t enough for Apple, they also demand 30% of your profits, which is more than most multi-million–dollar investors would ever ask for!

I guess I finally understand why it’s called Apple with an apple logo, just like it wasn’t enough for Eve, it’s never enough for Apple either. Pure greed!
Click to expand...
Don’t mistake what I’m about to say as support for Apple’s practices and attitude toward developers, BUT, owning the hardware you want to develop something for is usually a good idea, and often a requirement. Also, Apple is not the only tech company that chargers about 30%. They may be one of the biggest, hence the scrutiny, but it is pretty much an industry standard.
 
  • Like
Reactions: Unregistered 4U
klasma said:
Series A funding for startups in the US is around $20M on average. If they don’t manage to reach more than $1M of annual revenue in that phase, they are likely to fail.
Click to expand...
True. $1M sounds like a lot of revenue - and for an individual it definitely is - but for a business, it's kinda not.
A million dollars would let you make payroll for ~7 people (with benefits), excluding office space or any other overhead.

Stretching that a bit, I wouldn't inherently object to calling a company of maybe 10 employees a startup.
 
germanbeer007 said:
Options:
- Build a web site.
- Build a progressive web app.
- Build an iOS app that charges 30% more in app versus the web.
- Don't build for iOS at all and just target the 70% marketshare that is Android.
- Build your own phone with your own OS.

plenty of options. it's not hard, Garry Tan + Tim Sweeney.
Click to expand...
Other option, use only stock iOS apps.
 
frenchcamp49er said:
Can’t buy Sam’s Cola at Target.
Click to expand...
True, but Walmart produces Sam's Cola. It's their product. It's their right to sell it in the store they please.

Coca Cola is made by an independent company. They have the right to sell it in any store they please, too.

But when it comes to iDevices, creators and consumers have no choice but to sell and buy all products in one store.
 
  • Love
Reactions: _Mitchan1999
chrono1081 said:
Uh if they knew anything they'd know startups pay a measly 15% with the Apple small business program, that's insanely minimal compared to what you get. Too many people never wrote software in the 90s and early 00's before app stores and don't seem to understand the enormous benefits these stores bring.
Click to expand...
Yeah, not sure why they’d do this, have their name not been in the news enough recently? Incredibly disingenuous, butt hey couldn’t make the same comments about ACTUAL small businesses that would only pay 15% (is that because 15% is less than what YC charges?). Looking at a list of electronic marketplaces, many of them charge more than Apple does for a company making less than a million. And, once they make a million, if they can’t run a business off of 700,000 dollars a year, then that’s really on them. I WISH I had the problem of having to pay Apple $300,000 because my app pulled in a million in a year.
 
You must log in or register to reply here.
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.
Top Bottom
Back