Apple Inc Updates
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Apple’s iron grip on the App Store has been unleashed by a U.S. federal judge, who ordered the iPhone maker Friday not to interfere with apps that want to take payments outside its store.
Until now, Apple has banned apps from including links or even informing their customers that they can subscribe or purchase digital items outside the App Store, for example via a website. Meanwhile, the Cupertino company charged a 15-30 percent fee on payments it processed.
U.S. District Judge Yvonne González Rogers said these actions were “competitive” and “permanent” prevented Apple from blocking applications to bring “buttons, external links or other calls to action” that included customers following purchase mechanisms in addition to in-app purchases.
Apple shares fell 2.5% on the news. Shares in Spotify, the music streaming app that argument also versus Apple’s App Store commissions, rose by a similar amount.
The ruling comes in response to a lawsuit filed by Fortnite maker Epic Games in August 2020. Epic made changes to Fortnite earlier this month to circumvent Apple’s App Store payment system, which prompted Apple to to block the game.
Tim Sweeney, Epic’s CEO, calls Apple a monopoly and says in a interview with CNBC that “If every developer can accept their own payments and avoid the 30% tax by Apple and Google, we can pass on the savings to all our consumers and players.”
However, the judge said she could not conclude that Apple was a monopolist “under federal or state antitrust laws”. She added that it would not be impossible to show that Apple was operating an illegal monopoly, but that “Epic Games could not prove it”.
She said the $ 100 billion gambling market was “ripe for economic exploitation”, but that Epic had “achieved too much”. She also rejects Epic’s claim that customers can bypass the App Store by downloading apps, saying she does not find Apple’s commissions a violation of competition law.
Sweeney said after the ruling that it was not a victory for developers or for consumers. He said Fortnite would return to the iPhone as ‘able to offer Epic in-app payment in fair competition with Apple in-app payment’. Epic also said it would appeal against the decision.
Apple this month offers a small concession to developers so-called “browser programs” such as Netflix and Spotify, so that they can include links to their own websites to bypass the App Store fees. But gaming apps — about three-quarters of the revenue from the App Store — were conspicuously absent in the new deal.
Apple welcomed the ruling in a brief statement and applauded the judge when he admitted that “success is not illegal”.
“We are very pleased with this decision. This is a resounding victory, ‘said Kate Adams, Apple’s general counsel.