In an inevitable development in the never-ending Epic vs Apple debacle, Y Combinator has weighed in to say the App Store costs startups too much money.

This ongoing legal saga concerning Apple's App Store, is once more at a stage where the courts are inviting interested parties to comment. These amicus briefs are intended to be a way for companies and individuals to present arguments supporting one side or the other.

Y Combinator, a venture capitalist, argues that it would back app developers if it were not for Apple's 30% App Store fee. Consequently, Apple being forced to change its App Store rules was a "welcome relief" that ended what Y Combinator describes as "Apple's anti-competitive block on entry and expansion."

"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,'" says its full court filing.

The legal case sees Apple appealing against the earlier ruling. Y Combinator, in a 24-page and over 5,000-word filing, asks that the court deny the appeal, and describe Apple's arguments as "fundamentally flawed."

The company dismisses Apple's reducing its commission for developers earning under $1 million annually as being trivial. "Their savings resulting from a temporary exemption from the Apple Tax... are a rounding error at most."

Central to the firm's argument is that "Startups are not founded with the ambition to remain small businesses; rather, they seek exponential, uncapped growth, and a trajectory that quickly exceeds $1 million in revenues per year."

Y Combinator chooses to ignore that Apple cuts the fee on subscriptions to 15% after the first year. The investor also doesn't seem to mind that that Epic Games has the exact same free rate for businesses earning up to $1 million annually, and charges 12% after that.

Y Combinator's is trying to split an incredibly fine hair in saying that 12% charged by Epic is perfectly fine, but Apple's 15% should not be allowed at all, and should be zero instead.

"Apple Tax"

Y Combinator describes App Store fees as "Apple Tax" ten times across the filing, and says 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."

Reduced to its simplest form, Y Combinator's argument is that third-party developers should get a free ride from Apple. It's disingenuous, not least because Apple is enabling these firms to reach a global market that wouldn't exist without Apple.

The court filing says that Epic did not write any of the amicus brief, nor pay for it to be written.

The next stage of the legal case is an oral argument presentation, currently scheduled for October 21, 2025.

Uodate August 23, 2:54 PM ET Updated with removal of Y Combinator as Epic Games investor.