In the ongoing legal battle between Epic Games and Apple, venture capital firm Y Combinator has submitted an amicus brief criticizing Apple’s App Store fees, which it argues are detrimental to startups. Y Combinator, a significant investor in Epic Games, contends that the 30% commission Apple charges on App Store transactions imposes a substantial financial burden on emerging companies, potentially stifling innovation and growth.
The legal dispute has reached a phase where courts are soliciting input from interested parties through amicus briefs. These documents allow organizations and individuals to present arguments supporting one side of the case. In its 24-page filing, Y Combinator asserts that the App Store’s fee structure has historically deterred it from investing in certain app developers. The firm describes Apple’s commission as an anti-competitive block on entry and expansion, suggesting that the fee has been a significant barrier for startups aiming to scale their operations.
Y Combinator’s brief states, For the first time in nearly two decades, Y Combinator can seriously consider investing in innovative businesses that would have been impossible in the past because of the ‘Apple Tax.’ This statement underscores the firm’s belief that reducing or eliminating the App Store commission could open new avenues for investment in the tech sector.
The venture capital firm also addresses Apple’s recent reduction of its commission to 15% for developers earning under $1 million annually. Y Combinator dismisses this adjustment as insufficient, labeling the savings as a rounding error at most. The brief emphasizes that startups are typically founded with ambitions of rapid growth, aiming to exceed $1 million in revenue quickly. Therefore, the temporary relief offered by the reduced commission does little to alleviate the long-term financial challenges posed by the standard 30% fee.
Central to Y Combinator’s argument is the assertion that the 30% revenue share can 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. The firm uses the term Apple Tax multiple times throughout the brief to highlight its view that the commission is a significant financial burden on developers.
It’s noteworthy that Y Combinator’s position aligns with its financial interests, given its investment in Epic Games. The brief clarifies that Epic Games did not author or fund the amicus brief, emphasizing Y Combinator’s independent stance on the matter. However, the firm’s support for Epic Games’ position is consistent with its investment strategy and interest in fostering a more favorable environment for startups.
The next phase of the legal proceedings is an oral argument presentation scheduled for October 21, 2025. This session will provide both parties an opportunity to present their cases before the court, potentially influencing the future of App Store policies and their impact on developers.
