Y Combinator Backs Epic in Apple Legal Battle, Calling App Store Fees a Barrier to Innovation
YC Joins Antitrust Dispute Between Apple and Epic Games
Startup accelerator Y Combinator (YC) has stepped into the long-running legal dispute between Apple and Epic Games, filing an amicus brief in support of Epic’s stance. The case, which began in 2020, revolves around Apple’s App Store policies and their impact on developers, particularly the controversial 30% commission fee on in-app purchases and downloads.
Epic Games launched its lawsuit after claiming that Apple unfairly banned developers from informing users about cheaper payment alternatives outside the App Store. While a judge later ruled against Apple’s “anti-steering” policy, the company responded by introducing a link program that still charged developers a 27% fee on external payments.
Court Orders and Apple’s Appeal
In April, a judge determined that Apple’s revised system violated the original injunction, ordering the company to stop limiting alternative payment options and to refrain from collecting commissions on those transactions. Apple has since filed an appeal, prompting YC to publicly side with Epic Games and urge the court to reject Apple’s challenge.
The Venture Capital Perspective
In its filing, YC stressed the significant burden Apple’s policies have placed on early-stage businesses:
“Y Combinator — and the larger venture capital community — have long been hesitant to back app-based businesses that were poor investments due to the Apple Tax. 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 further argued that the recent ruling offers a rare opportunity for new digital ventures:
“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’.”
The so-called “Apple Tax,” according to YC, has been “a profound and often insurmountable barrier to entry that stifles competition and innovation at its source.”
What’s Next?
The court will hear Apple’s appeal on October 21, with the outcome expected to have major implications for app developers, investors, and the wider digital economy. YC has made it clear that it sees this as a pivotal moment for innovation, urging the court to uphold the anti-steering rule.
Correction
This article clarifies that Y Combinator is not an investor in Epic Games, despite earlier reports from other outlets that suggested otherwise.
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