Y Combinator has filed an amicus brief supporting Epic Games in its ongoing legal battle against Apple, arguing that the App Store’s policies have long discouraged startup innovation.
Epic sued Apple in 2020, challenging the iPhone maker’s 30% App Store fee and its restrictions on steering users toward alternative payment options. Although a judge later ordered Apple to end its anti-steering policy, the company introduced a workaround that still charged developers a 27% fee on outside payments. In April, a judge ruled Apple was violating the injunction and ordered it to stop imposing restrictions and collecting fees on external transactions. Apple is now appealing that ruling.
In its filing, YC urged the court to deny Apple’s appeal, saying the so-called “Apple Tax” made app-based startups unattractive investments for nearly two decades.
“A 30% revenue share can easily 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,” YC wrote.
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The investor added that with the current ruling, it can now consider backing startups previously deemed unviable under Apple’s App Store terms. YC described Apple’s fees as a “profound and often insurmountable barrier to entry that stifles competition and innovation at its source.”
The next court hearing is scheduled for October 21.
