The admission arrived inside the dense language of a securities filing, easy to miss and hard to overstate. Apple, for the first time, told investors that regulatory changes have forced it to loosen control over the App Store, and that the erosion now reaches into a services business worth more than $100 billion a year.
The warning itself was blunt. Purchases completed through alternative payment systems, Apple said, “may not result in any commission” for the company. That scenario is no longer hypothetical. Services revenue and profit margins in the quarter reported this month both fell short of Wall Street estimates, and the miss arrived with the store’s economics under attack on several fronts at once.
The consumer data shows the slide. Sensor Tower measured U.S. App Store spending in the second quarter down 6% from a year earlier, after growth of 9% in the same period of 2025. Appfigures, a rival analytics firm, estimates Apple’s U.S. commission revenue has shrunk 18% so far this year. Two firms, two methods, the same direction: the store is transacting less and earning less on each transaction.
Regulatory pressure moved in step. Germany’s Federal Cartel Office, the Bundeskartellamt, closed its antitrust investigation into App Tracking Transparency, the tool Apple introduced in 2021 to limit how apps follow users across other companies’ services. The case ended only after Apple agreed that consent prompts shown to third-party apps would be fully neutral, with no defaults tilted toward Apple and no wording advantages for its own software.
The German settlement is the latest link in a chain of concessions that began in Europe and has since circled the globe. The Digital Markets Act forced Apple in 2024 to admit alternative app stores and payment systems inside the European Union, ending a decade in which Apple was the only gateway onto its own platform. In the United States, a Justice Department antitrust suit and a years-long fight with Epic Games over the 30% commission have pushed the same questions through the courts. South Korea and Japan have written their own app-store rules. Each settlement narrows the ground on which Apple’s fee structure stands, and each one lands on the same profit line.
The fee structure itself has been bending for years. Apple cut its commission to 15% for developers earning under $1 million a year in 2020, an olive branch extended as scrutiny mounted. European regulators fined the company about 1.8 billion euros in 2024 over rules that stopped music apps from telling users about cheaper options outside the store. Each concession was presented as a one-off; together they read as a retreat in installments.
For a decade, services carried Apple’s growth story after iPhone unit sales plateaued. The segment padded margins, smoothed revenue, and gave investors a reason to hold the stock whenever hardware sales wobbled. Analysts now say the model is being renegotiated jurisdiction by jurisdiction, and that the compounding effect of many small concessions is harder to model than any single court ruling. One analyst compared the process to erosion: no single wave changes the coastline, but the beach disappears anyway.
The App Store was designed as a one-stop marketplace in which Apple set the terms, collected the fees, and controlled the relationship with every developer on the platform. That architecture was always likely to attract regulators; the surprise is how quickly the pressure spread, from the European Commission’s fines and rulebooks, to a German consent dialog, to Apple’s own guidance to investors about commissions that may never arrive.
The revenue line feels the weight from two directions at once. Consumer spending inside the store is softening, with Sensor Tower pointing to subscription fatigue, saturated mobile games, and the migration of purchases to the web, where Apple collects nothing. At the same time, every regulatory settlement gives developers another reason to route payments around the store. The commission model that funded a decade of services growth now faces a slow-motion squeeze that no single fix addresses.
What comes next is a question of degree, not direction. Developers who once had no choice now have alternatives in Europe and, gradually, elsewhere. Regulators in several countries are still examining the same practices. And Apple’s own filings now concede the possibility of collecting nothing on purchases made outside its payment rails. The question investors are asking is no longer whether the App Store’s economics will change, since the company has admitted they already have, but how much of the $100 billion services machine survives the changes still in flight.
The advertising business adds another layer of exposure. App Tracking Transparency already reshaped mobile advertising after its 2021 launch, and the German settlement’s neutrality condition extends that logic: consent prompts shown to third-party apps must not steer users toward Apple’s own advertising, leveling a field Apple had built with a structural advantage. Analysts said the condition applies the standard that Europe has been applying to the app store to the company’s ad business, and the pattern suggests regulators intend to keep moving down the same list.
The next test is the September quarter. Services growth has been the counterweight to hardware cyclicality, and each percentage point of margin lost to payment alternatives compounds across a business that investors have valued on its stability. The question is whether the App Store can still grow while regulators renegotiate its terms, or whether the services machine now grows only as fast as the regulators allow.
