Apple exec Phil Schiller testifies that he raised concerns over App Store commissions on web-based sales

Core Viewpoint - Apple is facing scrutiny over its commission structure for app developers, particularly regarding a 27% fee on purchases made outside the App Store, which has raised concerns about compliance and developer relationships [1][5][6]. Group 1: Commission Structure - Apple typically charges a 30% commission on in-app purchases, but a court ruling reduced this fee to 27% for external purchases [2][3]. - The company decided to apply the same 3% fee reduction to developers in its Small Business Program, lowering their commission from 15% to 12% for transactions outside the App Store [6]. Group 2: Internal Concerns and Decision-Making - Phil Schiller, an Apple executive, initially raised concerns about the implications of charging commissions on external purchases, fearing it would change the App Store's role to that of a collection agency [5][6]. - Despite these concerns, a pricing committee, including CEO Tim Cook, ultimately decided to implement the commission on external purchases [6]. Group 3: Financial Impact Analysis - Apple conducted analyses to understand the financial impact on developers who link to their own websites, considering factors like customer abandonment due to a less seamless experience [7]. - The company also explored how restrictive rules on link placement could affect the number of apps opting to implement external links [8]. Group 4: Commission Timing and Customer Warnings - Apple considered various options for when to charge commissions, initially planning to charge the 27% fee on external purchases within 72 hours of a link click, later extending this to seven days [9]. - There were discussions about how warnings to App Store customers would be presented, with updates suggesting potential privacy or security risks when transacting outside of Apple [10][11].