UPD: Apple's 30% Tax on IOS NFTs Ruled Illegal

The US Court of Appeals ruled that Apple’s 30% tax on in-app purchases of NFTs was illegal, a decision that could have major implications for the crypto industry.

Alex Harutunian

May 13, 2023 - 1 min read

In October 2022 we wrote about Apple updating its AppStore terms and conditions. Among others, there are paragraphs about NFT and crypto exchanges. The policy for the crypto exchanges was clear: to list the apps they needed to have “appropriate licensing and permissions” in the regions of distribution. As for NFTs, Apple allows viewing and browsing of NFT collections, but transactions are only possible through in-app mechanisms, which meant paying that 30% tax.

In a landmark decision by the US Court of Appeals for the Ninth Circuit, Apple’s 30% tax on NFT transactions has been deemed illegal. The case, initially brought forward by Epic Games, creator of the widely popular Fortnite video game, argued that App Store policies were anti-competitive. Epic Games founder and CEO Tim Sweeney tweeted that “Apple prevailed” broadly, but championed Epic’s one win on April 24.

Fortunately, the court's positive decision rejecting Apple's anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We're working on next steps.
— Tim Sweeney (@TimSweeneyEpic) April 24, 2023

If left standing, the decision could have lots of benefits for Web3 app developers. Generally, charging a 30% tax is something crypto community would never understand: for instance, OpenSea NFT marketplace has historically charged a 2.5% commission on NFT sales but under the pressure of crypto society the company had to eliminate the fee to look better against competitors.

However, the community expect Apple to appeal. Ultimately, this ruling deals a significant blow to the company, which has faced extensive criticism for its App Store policies. The ruling’s outcome is uncertain, but it could have a profound impact on the NFT market and the entire crypto industry. We continue to observe!