Apple executive Phil Schiller, responsible for the App Store, testified in court, acknowledging apprehensions he raised about the 27% commission Apple initially planned to charge app developers for purchases made outside the App Store. Schiller expressed concerns about compliance risks, potential conflicts with developers, and the need for Apple to conduct audits to verify transactions.
Despite Apple’s compliance with the court order to allow developers to link to alternative payment methods, the commission reduction to 27% for these purchases was considered insufficient by Epic Games CEO Tim Sweeney, who alleged a lack of good faith. Epic Games and Apple returned to court for Rogers to determine potential violations of the initial order.
Schiller’s testimony revealed his objections to the commissions, seeing them as a deviation from the App Store’s role and potentially damaging the relationship with developers. He feared the need for collection efforts and audits, which he believed could create a contentious environment.
Apple’s decision to charge commissions was ultimately made by a pricing committee that included Tim Cook and legal counsel, despite Schiller’s concerns. The same 3% reduction was applied to developers in the Small Business Program, lowering their commission to 12% for external transactions.
Apple conducted extensive analysis to evaluate the financial impact on developers, including the potential for customer abandonment due to friction in using external payment methods. The company also considered the effect of restrictive rules on the implementation of external links and the financial impact of excluding certain partners from the program.
The timing of commission charges was another topic of debate, with Apple initially considering a 72-hour window after link clicks, but later extending it to seven days. Lawyers suggested that Cook was involved in shaping the messaging for customers, emphasizing the lack of transactions with Apple for external purchases and introducing subtle suggestions of privacy or security risks with web-based payments.
Schiller’s testimony sheds light on the internal deliberations within Apple regarding the implications of charging commissions on web-based transactions, with concerns raised about potential compliance issues and negative effects on the developer ecosystem.
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