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Verdicts & Settlements

Judge: Apple Must Remove Some App Store Payment Rules

— September 10, 2021

However, Epic Games–the company behind the lawsuit–said that the judge’s ruling isn’t much of a win.

A federal judge has instructed Apple to remove many of its App Store rules, allowing developers to send their users to alternate payment portals.

In her ruling, U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California said that Apple had violated California state laws against unfair competition by preventing app developers from directing customers to “other ways to pay for their services.”

Gonzalez Rogers’ ruling gives Apple 90 days to let developers include links in their apps to other payment forms.

If consumers opt to pursue such links, developers can receive payments that are not reduced by Apple’s mandatory commission schemes.

However, the ruling is not ideal for content creators.

According to Reuters, while the ruling does let developers direct users to non-Apple payment systems, it does not compel Apple to let creators use their own in-app services. Apple will therefore be allowed to continue charging commissions on in-app transactions, which can be as high as thirty percent.

Epic Games, the studio behind ‘Fortnite,’ said that it will appeal the ruling.

Epic’s CEO, Tim Sweeney, further said on Twitter that the ruling is neither “a win for developers or for consumers.”

A gavel. Image via Wikimedia Commons via Flickr/user: Brian Turner. (CCA-BY-2.0).

Gonzalez Rogers also refrained from stating or suggesting that Apple has a monopoly on an important digital marketplace—potentially confounding the federal government and other critics’ antitrust initiatives against the technology company.

“While the court finds that Apple enjoys considerable market share of over 55 percent and extraordinarily high profit margins, these factors alone do not show antitrust conduct,” Gonzalez Rogers wrote. “Success is not illegal.”

While Apple shares fell by several percent after Gonzalez Rogers’ ruling went public, Apple has still claimed a victory of sorts.

“Today the court has affirmed what we’ve known all along: The App Store is not in violation of antitrust law,” Apple said in a statement. “As the court recognized: ‘Success is not illegal.’ Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”

Nonetheless, the New York Times notes that Apple is still expected to appeal the decision, asking the courts to prevent the order from going into effect.

The Times suggests that either Apple or Epic could also appeal to the U.S. Circuit Court of Appeals for the Ninth Circuit. The 9th Circuit would assign a three-judge panel to review Gonzalez Rogers’ decision.

While such a review could take a year or more to complete, it may resolve the litigation—unless, of course, the case is further escalated and heard before the U.S. Supreme Court.


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