- Apple’s Changing Role and VAT Responsibilities: The Epic vs. Apple case may lead to Apple allowing external payment options, which could change its status as the “deemed seller” for certain transactions. This shift could result in VAT and sales tax collection responsibilities moving from Apple to individual app developers, requiring businesses to register for VAT in more jurisdictions, particularly within the EU.
- Increased Compliance Burdens: Developers offering alternative payment methods will need to accurately determine customer locations, apply the correct VAT or sales tax rates, and file returns in multiple countries. Smaller teams lacking robust tax infrastructure may face a higher risk of non-compliance.
- Enhanced Pricing Transparency and Tax Expectations: With greater control over payment processes, developers can provide clearer tax breakdowns to consumers. However, this also raises expectations from regulators for more accurate tax calculations and disclosures, placing additional compliance demands on developers managing their own payments.
Source VAT IT Compliance
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The legal battle between Epic Games and Apple has reached a pivotal moment, significantly impacting App Store policies and developer rights.Reddit+4Wikipedia+4Reddit+4
⚖️ Background: The Dispute
In 2020, Epic Games introduced a direct payment system in Fortnite, bypassing Apple’s in-app purchase mechanism to avoid the 30% commission fee. This move led Apple to remove Fortnite from the App Store, prompting Epic to file a lawsuit alleging antitrust violations.Northern District Court+5The Washington Post+5Business Insider+5Reuters
⚖️ Legal Proceedings and Rulings
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2021 District Court Decision: Judge Yvonne Gonzalez Rogers ruled that Apple was not a monopolist under federal antitrust laws but found its anti-steering provisions—restrictions preventing developers from directing users to alternative payment methods—violated California’s Unfair Competition Law. Hausfeld+8Wikipedia+8robinskaplan.com+8
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2023 Ninth Circuit Appeal: The appellate court largely upheld the district court’s findings, affirming that Apple’s anti-steering rules were unlawful under California law. However, it agreed that Apple did not violate federal antitrust statutes. cdn.ca9.uscourts.gov+9Sullivan & Cromwell+9Global Competition Review+9
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2024 Supreme Court: The U.S. Supreme Court declined to hear further appeals, effectively cementing the lower courts’ decisions.
Apple’s Compliance and Recent Developments
Despite the rulings, Apple implemented measures that critics argue undermine the spirit of the court’s decisions:
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Introduced a 27% fee on purchases made through external links, closely mirroring the original 30% commission.Reuters
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Displayed warning messages to users about potential risks of using alternative payment methods, which some view as deterrents.Reuters
In April 2025, Judge Gonzalez Rogers found Apple in willful non-compliance with the injunction, referring the matter for potential criminal contempt proceedings. Reddit+4Wikipedia+4New York Post+4
Fortnite’s Return to iOS
Following the enforcement of the court’s orders, Fortnite returned to the U.S. App Store in May 2025 after nearly five years. Epic Games’ CEO, Tim Sweeney, hailed this as a significant victory for developers and consumers alike. Diario AS+3Reuters+3Business Insider+3Business Insider+1New York Post+1
Broader Implications
This case sets a precedent for how digital marketplaces operate, emphasizing the importance of fair competition and developer autonomy. It has already influenced other tech companies and may lead to more significant changes in app store policies worldwide.
