A win for you: The Developer Tax Saga Continues

Last June, I spelled out four creative approaches organizations were taking to dodge Apple’s in-app purchase (IAP) commission. (Read more here.) This revenue share is what has been referred to as the “Developer Tax,” a set of rules and fees imposed on those who wish to monetize the experiences they create and publish on the App Store. These rules encouraged teams to lean into authenticated‑only flows, free‑but‑limited tiers, and bundling with physical goods to hold tight the margins they rely on. This past week, a California judge gave every mobile product team a welcome break. In Epic v. Apple, Apple has now been banned from collecting fees on purchases made outside of the App Store and from restricting teams from encouraging users to make their purchases outside of their iOS app. The bottom line is, product teams can now take advantage of the fact that:

1. Apple can no longer block or discourage external payment links.
2. Apple can no longer impose its “external commission” or require a special entitlement to get a commission break.

What does that mean for you and your teams moving forward? Let’s dive deeper into what this means and what actions you should be taking.

What was once a hope and a prayer is now standard practice: external links

Apple previously inserted a scary interstitial warning and a 27% revenue share when apps relied on the external entitlement to send users to pay for services on the web. It presented as a booby trap that was paired with a steep financial disincentive. However, if you previously shelved an external‑link flow, it is time to get prototyping again. A/B testing a single‑tap web‑checkout has never been more worthwhile. Even with a modest drop‑off, the margin boost is likely worth it. (For example, check out the Verge article on how Stripe is responding to this news.

“Free‑But‑Limited” tiers get sharper teeth

Because the ruling also prohibits Apple from “impeding developers’ ability to communicate with users,” you can lean harder on in‑app copy and transactional email to steer free users to cheaper web upgrades without fearing rejection in App Review. With this break, teams should return to not just the design of their in-app experiences but also their drip campaigns to make the most of this change!

Bundling remains attractive, but now there is less of a need

Bundling digital content with physical goods (think fitness bikes with a content subscription or a book with an in-app study guide) is still valid, yet the incremental freedom on payment links reduces the ROI on expensive bundling workarounds. Take a step back and ask, should we treat bundling as a brand differentiator, not a pure payments hack?

The Bottom Line

Apple intends to appeal, but injunctions stay in force unless a higher court pauses them. While Apple strategizes, product teams have a great window of opportunity. In last year’s article, I stated the rules aren’t settled and this action doesn’t fully eliminate the “Developer Tax,” but it certainly shrinks Apple’s ability to enforce it. It is time to return to your user journey and further refine it so you are not leaving money on the table.

• Jack Cunningham

  Director, Product Management

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