Washington, D.C. — Earlier this week, Apple threatened to remove popular crowdfunding app Patreon from the iOS App Store unless Patreon forces the creators using its services—typically independent podcasters, musicians, artists, and developers—to use Apple’s own billing system. This would impose a 30% transaction fee on them, one significantly higher than the fee they currently pay to Patreon. In response, the American Economic Liberties Project released the following statement.

“Apple has gone from ‘Think Different’ to ‘Think Extortionate,’” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “This outrageous 30% revenue cut—nearly 2.5 times more than Patreon’s most premium membership tier—is especially egregious given Apple’s ongoing, worldwide legal battles over its monopolistic practices. Unfortunately, Judge Yvonne Gonzalez Rogers’s flawed reasoning and poor case management in the Epic lawsuit has emboldened Apple by narrowing and delaying consequences for Apple’s anticompetitive practices. With developers already suffering and Patreon creators slated to be next, Judge Rogers must prioritize setting a final hearing date as soon as possible.”

“But to fully remedy this miscarriage of justice and prevent further abuses of monopoly power, policymakers must enact robust legislation to fix app store markets,” added Kilgour. “Creators, developers, and consumers can’t wait any longer.”

Patreon creators have issued their own statements on social media decrying Apple’s creativity-crushing greed. For example:

• “Apple just decided to start stealing money from me and other creators for no reason other than it seemed like a good revenue stream that requires literally no work on their part” [source]
• “I can not believe Apple is taking a 30% cut of independent creator’s money on Patreon. We are the people who buy your products and now you want to take food off our tables. Isn’t it enough that we spend thousands on your computers, tablets and phones? Ridiculous.” [source]
• “I completely stopped buying [Apple’s] products, subscribing to their services, and consuming their content. I no longer deliver music to them. I am completely out of their ecosystem, yet they [effing] want 1/3rd of my Patreon income.” [source]

Epic filed an antitrust complaint targeting Apple’s anticompetitive App Store practices in August 2020. In September 2021, Judge Gonzalez Rogers ruled for Apple on Epic’s federal antitrust claims because she prized technocratic “market definition” requirements over “practical indicia”– in other words, she overlooked direct evidence of how the market actually works. However, she ruled in favor of Epic under California’s unfair competition law, and issued a narrow permanent injunction ordering Apple to refrain from preventing developers from adding links that “direct customers to [other] purchasing mechanisms.”

Apple first delayed enforcement of the injunction through meritless appeals. After exhausting all appeals, in January 2024, Apple told the court it was complying with the injunction. Epic responded with a motion arguing that Apple was defying the court’s order. Epic explained that compliance with the court’s injunction “should have been simple; all Apple needed to do was to remove the illegal anti-steering language from its App Store Review Guidelines.” Instead, Apple provided a pseudo-alternative to its 30% App Store fees by charging developers a 27% fee to include links to their own websites and their own payment processing options– which is equivalent to Apple’s 30% fee once typical 3% credit card service fees are taken into account. To further ensure developers could not actually benefit from this alternative, Apple shows consumers “scare screens” specifically designed to deter them from clicking on links to developers’ websites. The court held a series of hearings in May 2024. Despite finding Apple executives’ justifications worthy of deep skepticism, the court has allowed discovery disputes to delay resolution of Apple’s violation of the injunction until at least fall 2024.

Separately, in March 2024, the Biden-Harris administration’s Department of Justice, along with sixteen other state and district attorneys general, filed a lawsuit targeting Apple’s monopolization of high-end smartphone markets. In June 2024, Apple became the first company charged with violating Europe’s new Digital Markets Act because of its exorbitant fees and similar noncompliant anti-steering practices in its App Store.

Apple’s imposition of (at least) 30% fees on Patreon creators was first announced in December 2023. Patreon will start the first phase of implementing Apple’s requirements in November 2024– otherwise it would face removal from the App Store. Patreon has announced that it will have Q&A threads open on its Discord about changed terms for creators until Friday August 16th at 5pm Eastern time.

Read about Congress’s bipartisan Open App Markets Act here.

Read Economic Liberties’ Big Tech Guide for State Lawmakers on regulating app store dominance here.

Read more about Apple’s history of abusing its monopoly power here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.