A federal judge has ordered Apple to allow iPhone software developers access to their websites so that customers can make in-app purchases. Apple had previously required that all transactions be made through its payment system. This change will stop Apple from collecting 15%-30% of revenue from transactions made through its payment system.
This is the primary outcome of the Epic Games. It’s exactly what Epic requested in the first instance.
Epic Games vs. Apple is a huge loss for Apple
Judge Yvonne Gonzalez Rogers delivered her ruling in the case on Friday. Apple was not left with a complete loss. She ruled that Apple had not violated antitrust laws and stated specifically that “success does not constitute a criminal offense.”
She also directed a major change in the way that iPhone apps deal with in-app purchases. In the formal language of court rulings, she wrote:
Apple Inc., its officers, servants, employees and servants, as well as any person who is actively participating with them (“Apple”) are permanently restrained from allowing developers to (i) include in their apps and their metadata buttons or other calls-to-action that direct customers to purchasing mechanism, In-App Purchasing, and (il) communicate with customers using points of contact acquired voluntarily by customers through account registration within their app.
Epic Games asked exactly what they wanted originally
Apple kicked Epic Games out of its App Store in 2020, resulting in the Epic Games v. Apple lawsuit. Epic had created a direct payment system for in-app purchase to Fortnite. This was contrary to App Store rules. Apple made this restriction to prevent all apps from using their in-app payment system, not just for games.
Judge Rogers has ordered Apple to allow direct payments systems. It seems likely that Epic Games and Fortnite will be able to return to the App store. The game developer wants back in — this week it asked to be let in after a Korean court made a similar ruling about in-app purchases. The court injunction won’t take effect until December 2021.
A spokesperson for Apple gave Cult Of Mac his official response to the ruling.
“Today, the Court confirmed what we have known for years: The App Store isn’t in violation of antitrust laws. The Court acknowledged that’success does not make you illegal’. Apple is in fierce competition in all segments in which it operates, and we believe our products and services are the best available. We will continue to work to ensure that the App Store remains a trusted and safe marketplace that supports more than 2.1million U.S. jobs and a vibrant developer community. The rules are equally applicable to all.
Despite Apple’s positive reaction, the change will likely have an impact on Apple’s bottom line. Apple shares dropped more than 2% since the announcement of the ruling. The iPhone-maker used to collect between 15% and 30% from all in-app purchase revenue. Developers will now have the option of handling these transactions themselves and Apple will not be charged.
It is not known how many companies who create iPhone software will set up their own payment system. Many large companies will, as many already have them for web sales. Smaller developers may prefer Apple’s in-app purchase system, because it’s easier for them.
Apple did not state this in its official response, but it is almost certain that Apple will appeal the ruling.
Some developers want more
Judge Rogers’ decision that the App store does not violate antitrust laws is not universally accepted by everyone. Apple’s requirement that all iPhone software be sold through its App Store is still being criticized as a monopoly.
“Unfortunately, this court decision does nothing to address the real harm of Apple’s restrictive and monopolistic app store policies,” the organization Fight for the Future wrote in a statement. Apple will continue to hold a tight grip on the software that millions of people can run on their smartphones. This will allow it to actively support oppressive governments and censor apps used in journalism, dissidents and other vulnerable groups.
The group hoped that the court decision would make it mandatory for Apple to allow iPhone apps to be downloaded from any source. It didn’t happen, and Apple maintains that “sideloading” iOS software would lead to unacceptable levels of malware on iPhones.