Apple Fellow Phil Schiller, the executive responsible for overseeing the App Store, testified in court on Monday that he initially expressed concerns about the 27% commission Apple intended to charge app developers for purchases made outside the App Store. He believed this fee would create an “antagonistic relationship” between Apple and developers, and also raised concerns about potential compliance risks and the need for audit rights to verify transactions.

Typically, Apple charges a 30% commission on in-app purchases, but the reduced 27% fee was a result of the Epic Games-Apple ruling in 2021. The court ruled that although Apple was not a monopolist, it could no longer block app developers from providing alternative payment options to customers beyond Apple’s in-app purchases.

Apple complied with the ruling by updating its App Store Guidelines to allow developers to link to their websites from their iOS and iPadOS apps, providing customers with an alternative payment method.

However, Apple only reduced its commission by 3% for these purchases, which was met with criticism from Epic Games CEO Tim Sweeney, who accused Apple of “bad-faith” compliance.

The dispute between Apple and Epic Games has led to further legal action, with the case returning to federal court to determine whether Apple violated the original order to open the App Store to more competition.

According to Schiller’s testimony, he initially objected to the commission on outside purchases, citing concerns about the impact on Apple’s relationship with developers and the potential need for audits to collect payments.

Schiller stated, “I had great concerns about the collection of funds from developers,” and worried that the App Store would have to become a “collection agency” with rules for handling non-payment and audits.

He believed this would change the relationship between Apple and developers in a detrimental way.

The hearing has revealed the extensive process Apple underwent while debating the merits of charging a fee for outside purchases, with internal documents and emails detailing the back-and-forth between executives.

Despite initial concerns, a pricing committee including Apple CEO Tim Cook, former CFO Luca Maestri, and Apple’s legal team ultimately decided to charge developers a commission on outside purchases, with a 3% reduction in fees.

The company also analyzed the financial impact on developers who chose to link to their own websites and modeled how the “less seamless experience” of using non-IAP methods would affect customer behavior.

Apple considered various options for charging commissions, including a 72-hour window for charging the 27% fee, which was later extended to seven days.

Lawyers suggested that Cook was involved in crafting the warning to App Store customers about potential privacy and security risks associated with external links.

In another meeting, concerns were raised about Apple charging for web transactions, with one note stating, “This might be perceived like we’re trying to charge for what happens on the internet.”