Y Combinator just threw its considerable weight behind Epic Games in the blockbuster legal battle against Apple, filing an amicus brief that claims the App Store's 30% fee has systematically choked startup innovation for nearly two decades. The move marks the first time the startup world's most influential accelerator has formally entered the anti-trust fight.
Y Combinator just delivered a devastating blow to Apple's legal strategy, formally entering the years-long Epic Games antitrust battle with a legal brief that could reshape how courts view the App Store's impact on innovation. The startup accelerator that launched Airbnb, Dropbox, and Stripe is asking courts to deny Apple's appeal of a ruling that would force the tech giant to allow alternative payment methods.
The timing couldn't be more critical. Apple is currently appealing an April court order that would end its stranglehold on App Store payments, a ruling that came after Epic Games successfully argued the company violated an earlier injunction against anti-steering policies. That initial dispute erupted in 2020 when Epic openly defied Apple's 30% cut on all App Store transactions, leading to Fortnite's dramatic removal from iOS devices.
"Y Combinator — and the larger venture capital community — have long been hesitant to back app-based businesses that were poor investments due to the Apple Tax," the accelerator stated in its filing. The admission reveals how deeply Apple's fee structure has warped startup funding decisions across Silicon Valley.
The math is brutal for early-stage companies. Y Combinator argues that Apple's 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." For cash-strapped startups operating on razor-thin margins, that fee can mean the difference between Series A funding and bankruptcy.
