In a major setback for Apple, a judge ruled that the company will no longer force developers to use in-app purchasing. Apple is known to benefit from a 15-30% cut of gross sales. In the company’s legal battle with Epic Games, Judge Yvonne Gonzalez Rogers issued an injunction that said Apple will no longer be allowed to prohibit developers from providing links or other communications that direct users away from in-app purchasing.
This has brought about the possibility of developers directing users to their website to subscribe to or purchase digital content. If this happens, it will impact Apple’s App Store sales. The ruling says Apple cannot bar developers from providing buttons or links in their apps that direct customers to other ways to pay outside of Apple’s in-app purchase system, which charges developers commissions of up to 30%.
It also said that the iPhone maker cannot ban developers from communicating with customers via contact information that the developers obtained when customers signed up within the app. The judge issued a nationwide order that allows developers to put into their apps buttons, external links or other calls to action that direct customers to purchasing mechanisms.
“Apple has not adequately justified its 30% rate,” Judge Gonzalez Rogers wrote in her opinion on the case. But she acknowledged Apple’s arguments that the use of the app store and the access to Apple’s consumer base does justify a commission. “A remedy to eliminate those provisions (preventing developers from directing users to outside payment methods) is appropriate. This measured remedy will increase competition, increase transparency, increase customer choice and information while preserving Apple’s iOS ecosystem which has precompetitive justifications.”
Apple’s response to Judge’s ruling in Epic Case: pic.twitter.com/LeF4osdTQC
— Mark Gurman (@markgurman) September 10, 2021
Judge Gonzalez Rogers also ordered Epic Games to pay at least $12 million in damages to Apple for breach of contract. “The court cannot ultimately conclude that Apple is a monopolistic under either federal or state antitrust laws.”
Tim Sweeney, CEO and Founder, Epic Games, tweeted that the ruling isn’t a win for developers or for consumers. “Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers,” he said. “Thanks to everyone who put so much time and effort into the battle over fair competition on digital platforms, and thanks especially to the court for managing a very complex case on a speedy timeline. We will fight on.”