The Platform Tollbooth Problem
For over a decade, Apple and Google have operated their app stores not just as marketplaces, but as powerful toll booths. Any developer or startup offering digital goods within an app was forced to route payments through their respective billing systems: Apple’s In-App Purchase (IAP) and Google’s Play Billing-while forfeiting up to 30% of revenue. If that sounds like a steep cut, it’s because it absolutely is. This “store tax” drew widespread criticism, particularly from developers from large apps like Spotify, Epic Games, and Netflix, who found the commissions not only excessive but anti-competitive. Apps couldn’t even inform users about cheaper options outside the app. These policies-especially Apple’s “anti-steering” rules-made app stores de facto monopolies for digital distribution.The 30% app store commission represents a significant revenue drain for digital businesses, especially for subscription-based services and SaaS applications.
The Epic Games Catalyst
Epic Games’ CEO, Tim Sweeney, initiated Project Liberty as a strategic legal campaign to challenge the monopolistic practices of Apple and Google’s app stores, particularly their 30% commission fees on in-app purchases. The project aimed to disrupt these platforms’ control over app distribution and payments, advocating for a more open environment for developers. Tim Sweeney knew Apple would contest this and laid a bait. Epic updated Fortnite with a hidden direct-pay option, bypassing Apple’s IAP. Apple fell for the bait, swiftly banned Fortnite, and Epic sued. The Epic Games v. Apple legal battle cracked open the conversation globally.The Epic v. Apple Verdict
In 2021, the U.S. District Judge ruled in a landmark decision:- Apple did not violate antitrust laws outright, meaning it could continue to control app distribution on iOS
- However, Apple’s anti-steering policies were deemed anti-competitive. The court issued a permanent injunction-Apple must allow developers to direct users to external payment methods
This U.S. ruling spurred similar regulatory pressure and legal action across South Korea, Japan, the EU, and other regions. Combined with the EU’s Digital Markets Act (DMA)-the tide turned decisively in favor of developers.
Global Overview: Where Developers Can Legally Bypass Fees
| Region | Apple Policy (2025) | Google Policy (2025) |
|---|---|---|
| USA | External links allowed (no Apple fee) | UCB allowed (reduced fee) |
| EU (EEA) | Alt payments/links allowed (10–17%) | UCB allowed for non-games |
| South Korea | Apple-approved PSPs (26% fee) | UCB mandated (26% fee) |
| Netherlands | Dating apps only | UCB allowed |
| Japan | Reader apps can link out | UCB allowed |
| India | No change | UCB allowed (4% fee reduction) |
| Other | No change | UCB allowed in select countries |
| China | No external billing allowed | Google Play not relevant |
UCB stands for User Choice Billing, Google’s alternative billing system that allows developers to use third-party payment processors.
Pre-2025 Loopholes: How Apps Circumvented App Store Rules
Before regulations loosened their grip, some apps found “creative” ways to get around the 30% cut. These hacks were rarely compliant but undeniably clever.Reader App Loophole
One common tactic was the “reader app loophole,” where apps like Kindle or Netflix claimed they were merely displaying previously purchased content. Apple couldn’t fault apps for letting users access pre-purchased content. So as long as the app didn’t explicitly link to external payment or prompt an in-app purchase, it was allowed to operate.Hidden Payment Redirections
Others experimented with code obfuscation, embedding hidden payment redirections. A few even used email notifications post-download to nudge users to pay outside the app.Spotify was one such company that implemented this strategy. If you’re in India and use Spotify, you’ve probably noticed that you can’t buy the Premium plan inside the app. You have to pay on the web. This is why.
The Payment Gateway Trap: What Developers Often Miss
At first glance, payment gateways (PGs) like Stripe or Razorpay seem like the obvious solution. But for in-app purchases, it’s not that simple.If you’re on iOS outside of allowed regions (like India or China), plugging in a PG directly into the app violates Apple’s policies, risking an app takedown.
Two Legal Workarounds for Developers
1. App-to-Web Redirect (Link Out Flow)
What it is: The app links users to a web-based checkout (hosted by Dodo Payments or the developer). Payment is completed outside the app, then access is granted in-app. Legal Status:- iOS: Legal in US, EU, South Korea, Netherlands (only dating apps), Japan (only reader apps)
- Android: Legal in all UCB-supported markets
- Simple to implement
- Fully compliant
- No app-side PCI burden
- Slight friction - user leaves app to pay
2. In-App SDK Integration (Third-Party SDK)
What it is: Embed a payment UI - such as Dodo’s React Native SDK - directly in your app to enable seamless checkout without requiring users to leave the app. Legal Status:- iOS: Legal only in EU (under DMA terms); elsewhere it’s still a violation
- Android: Legal in UCB markets, if proper UX and reporting are followed
- Smooth UX
- User stays in app
- Can match IAP experience
- Integration complexity
- Compliance risk outside allowed regions
Developer Strategy: Combine Legal Compliance with Revenue Efficiency
An effective global rollout strategy could look like this:1
U.S. Users
Use App-to-Web (no Apple cut)
2
EU Users
Use In-App SDK or App-to-Web (10–17% Apple cut)
3
Android Users in UCB Markets
Use In-App SDK with Google-compliant UX
4
Other iOS Markets
Use Apple IAP (or omit in-app purchases)
5
Other Android Markets
Use Google Play billing or distribute via alt app stores
The Biggest Opportunity
Among all the regulatory changes, the U.S. App Store presents the single largest opportunity for developers. With the 2025 guideline update following the Epic v. Apple ruling, developers can now legally include external links in their iOS apps that direct users to a web-based checkout. This means: no mandatory Apple IAP, no 30% fee, and full control over customer relationships and revenue. Given that the U.S. is the largest app revenue market globally, this change alone can significantly improve margins for any digital product business from subscriptions and SaaS tools to media and learning apps. For many, it’s a 30% revenue unlock in their most lucrative geography.The U.S. market represents the largest opportunity for revenue recovery, with developers able to bypass the full 30% Apple commission through compliant external payment links.
How Dodo Payments Enables This
Dodo Payments acts as a Merchant of Record, handling:- Global tax compliance (VAT/GST)
- Payment processing (cards, UPI, wallets)
- Invoicing, refunds, fraud prevention
- SDK & hosted checkout integration
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Mobile Integration
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Conclusion: A Developer-Friendly Future Is Here
For years, the 30% store tax was a take-it-or-leave-it ultimatum. Thanks to landmark cases like Epic v. Apple, regulatory pushback, and public pressure, that model is no longer universally enforceable. In 2025, developers finally have choices. By combining compliant workarounds like App-to-Web flows or SDK integrations with services like Merchant-of-Record platforms like Dodo Payments, it’s now practically and legally feasible to retain more revenue and control. The app stores haven’t opened the gates willingly but the gates are opening. And for developers, it’s time to walk through.The future of app monetization is here-one where developers can legally bypass excessive platform fees while maintaining compliance and user experience.