Apple CFO Kevan Parekh tells a London court it is impossible to accurately determine the App Store's standalone profitability and disputes claims of 75% margins
Kevan Parekh disputed claims the iPhone maker enjoys profit margins of about 75% on its App Store
Context & Ripple Effects
The profitability of Apple’s app-distribution business has been contested in litigation for years: an expert using internal documents previously estimated a 77.8% App Store operating margin, while Apple rejected that methodology. Apple had also brought in economists to defend its commission model against competition critiques.
This London testimony matters because it challenges whether a standalone margin can be measured at all, not merely the level of the disputed figure. That distinction goes to the evidence available for judging the economics behind App Store commissions.
First-order effects
- Apple’s immediate courtroom position is that claims based on a single App Store profitability figure may rest on accounting allocations that cannot be reliably isolated.
- Claimants pressing the 75% margin allegation face a more direct challenge to the methodology and evidentiary weight of that figure.
Second-order effects
- The dispute shifts attention from the headline commission rate to how platform costs, shared services, and revenues are assigned when assessing profitability.
- Competition cases involving app-store fees may require more detailed financial evidence rather than relying on broad operating-margin estimates.
Third-order effects
- If courts increasingly demand auditable, standalone economics, regulated platform take-rate disputes could turn as much on accounting transparency as on the nominal commission itself.
- The longer-term question is whether legal scrutiny produces common standards for measuring platform profitability; this testimony shows those standards remain contested.
The trend: This is one data point in the broader push to test App Store commission practices through competition law and more rigorous scrutiny of platform economics.