Felix Ortiz: Tess, hey — did you see the Supreme Court news from July second?
Tess Hollis: The Epic thing? Oh, I saw it.
Felix Ortiz: So the Supreme Court agreed to hear Apple's appeal of the contempt finding — and like, the contempt finding itself is wild. A judge said Apple was in contempt because after the Epic injunction they started charging twenty-seven percent on external-link purchases. Not zero. Twenty-seven.
Tess Hollis: That's the part that names the actual thing. Regulators forced the gate open, and Apple just moved the fee.
Felix Ortiz: And we're talking about a gate over a lot of money — ninety-six billion dollars in App Store billings in the U.S. in 2024 alone. So, yeah — that's what today is about. The App Store, the commission model, the court fights. And I guess what we're really trying to figure out is whether any of the regulatory pressure is actually breaking anything open.
Tess Hollis: Or whether the thirty percent was never the real mechanism to begin with.
Felix Ortiz: Oh — okay, yeah. That's the sharper version of the question.
Tess Hollis: Because if there were actual competition in iOS distribution, Apple couldn't hold thirty percent. The fee only survives because there's nowhere else to go on iOS. So the moment we treat the number as the problem, we've already conceded the deeper one.
Felix Ortiz: Right — but the part that doesn't click until you really look at it is *how* the door works. Like, okay, imagine a shopping mall where the landlord has to personally approve every single product before any store can put it on a shelf. Every product, every update to that product. And the landlord also runs its own stores inside the same mall.
Tess Hollis: That's the App Store.
Felix Ortiz: That's literally the App Store. Every app, every update — Apple's App Review team has to clear it across five categories before it touches a single iPhone. Safety, performance, business, design, legal. That's not a rubber stamp. That's discretionary power.
Tess Hollis: And that discretionary power is the actual mechanism. The thirty percent is almost — it's almost a side effect. Because if you have mandatory review across five categories and nowhere else to go, the fee is just what you charge when you know no one can leave.
Felix Ortiz: Yeah, and — wait, actually that's what I kept tripping over. Because most people hear 'App Store fight' and they think the fight is about the percentage. Cut it to twenty percent, everybody goes home. But the percentage only exists because of the mandatory review. Take away the gatekeeping power, the fee collapses on its own.
Tess Hollis: So what's the thing nobody's saying out loud?
Felix Ortiz: That Apple launched this whole model in July 2008 with five hundred apps and mandatory review baked in from day one. The commission and the control were always the same product. They were never separable.
Tess Hollis: Which is why the UK's Competition and Markets Authority called it an effective duopoly — Apple and Google together. Because if you're a developer, there's no third mall.
Felix Ortiz: And the duopoly framing is actually what makes the contempt finding so — okay, because the Epic injunction didn't say 'lower your fee.' It said Apple had to allow genuinely free external payment options. Free. And what Apple did was come back with twenty-seven percent on those external-link purchases. The judge in April 2025 called that contempt. Not 'close enough.' Contempt.
Tess Hollis: The toll booth moved three percentage points.
Felix Ortiz: Three. And then the Ninth Circuit upheld the contempt finding in December 2025, and now — July second this year — the Supreme Court takes the appeal. So we've got three levels of courts and the core question is still whether twenty-seven percent is 'free.'
Tess Hollis: Meanwhile the EU went a different direction entirely. The Digital Markets Act, effective March 2024 — that didn't just say 'let them link out.' It said allow alternative app distribution on iOS altogether. Which is structurally a bigger ask.
Felix Ortiz: Yeah, and — actually that's where the Notarization pathway comes from. Apple built a lighter-touch review process for apps distributed outside the App Store, technically satisfying the DMA. But lighter-touch is not the same as equivalent.
Tess Hollis: That's the thing nobody's resolved yet. Notarization versus App Store Review aren't the same product. The developer experience is different, user trust signals are different — and we actually don't know how that shakes out in practice.
Felix Ortiz: Right — and Japan followed with parallel rules in late 2025. So you've got the EU, Japan, and the UK's Competition and Markets Authority extracting behavioral commitments from Apple and Google in February 2026 — transparency on approvals, no preferencing their own apps. That's coordinated. That's not slow.
Tess Hollis: But commitments on transparency don't touch the distribution dependency. The CMA called it an effective duopoly — Apple and Google — and then got promises about process. Which is a weird outcome when the actual problem is structural.
Felix Ortiz: And that's — okay, that's the part that honestly I can't quite land yet. Because if the DMA gate is legally open and the UK extracted commitments, why are developers still mostly inside? It's strange — and it gets stranger when you look at the two-tier commission and what Apple claims it's actually buying you.
Tess Hollis: Okay, but that's the thing nobody's answered — the gate is legally open under the Digital Markets Act since March 2024, almost two years ago, Japan followed with parallel rules in late 2025, and the App Store Freedom Act is heading for House Energy and Commerce Committee markup in July 2026. Regulation is moving fast. So why isn't anyone walking out?
Felix Ortiz: Right — and I keep trying to answer that and landing on something uncomfortable. Because the honest version is — it's not fear, exactly. It might be math.
Tess Hollis: Run the math.
Felix Ortiz: Okay — so imagine a mid-tier game developer, five hundred thousand dollars in monthly billings. She could set up an external payment link right now, legally. Except Apple still charges twenty-seven percent on those purchases — the same rate the contempt finding is about. Then there's implementation overhead, and user friction when someone has to leave the app to pay. And she's probably under the Small Business Program threshold, so her current rate is fifteen percent, not thirty. She'd be paying more to leave than to stay.
Tess Hollis: Wait — fifteen percent. That's the two-tier structure. Developers under a million annually get the lower rate.
Felix Ortiz: Which means Apple has specifically made the developers most likely to stay quiet also the cheapest to keep. That's — yeah, I don't think that's an accident.
Tess Hollis: And then Apple's affirmative story on top of all of this is fraud prevention. Eleven-point-two billion in potentially fraudulent transactions prevented over six years, including two-point-two billion in 2025 alone. Which sounds substantial until you hold it against twenty-nine billion in annual platform revenue.
Felix Ortiz: That's — wait, actually lay that out. Because the numbers feel like they're supposed to cancel but they don't quite.
Tess Hollis: Eleven-point-two billion over six years is roughly one-point-eight billion annually in fraud prevented. Against twenty-nine billion in revenue per year. The security story doesn't scale to the fee. Which means either the fee is for something else, or Apple's claiming credit for infrastructure that costs them a fraction of what they're charging — and the dependency is so complete that developers have rationalized it into preference.
Felix Ortiz: And that's — okay, that's actually where I get stuck. Because no regulatory intervention so far has required Apple to publish its App Review criteria in real time. Nobody's required Apple to expose its APIs to third-party payment processors at parity with its own systems. Nobody's guaranteed alternative stores equivalent discoverability. Like, the DMA, the CMA commitments, the Epic contempt chain — every single one of those fights was about the percentage.
Tess Hollis: The fee, not the gate.
Felix Ortiz: Right. And so even if the Supreme Court rules against Apple — fee shifts, model changes — Mandatory App Review is still there. Untouched. That's the thing I can't resolve. Because the gatekeeping power doesn't live in the thirty percent. It lives in the review queue.
Tess Hollis: And I genuinely don't know whether developers would leave even if all of it were fixed. The App Store Freedom Act could pass markup in July, the infrastructure lead Apple has built since 2008 — the trust signals, the payment rails, the review familiarity — that might be self-reinforcing at this point regardless of what regulators extract.
Felix Ortiz: Yeah. I keep trying to land on an answer and I just — I can't. Honestly.
Tess Hollis: Neither can I. Which might be the most honest place to stop.
