A US appeals court has ruled that Apple cannot prohibit app developers from providing external links for payments in their apps. This decision came as a major blow to Apple’s long-standing policy of requiring in-app purchases to be made through its App Store, where it takes a 15-30% commission on each transaction.
The ruling from the Ninth Circuit Court of Appeals, which covers California and several other Western states, was in response to a lawsuit filed by game developer Epic Games, which accused Apple of antitrust violations. The lawsuit was filed after Apple removed Epic’s popular game Fortnite from the App Store for offering an alternative payment method that bypassed Apple’s fees.
In its ruling, the court stated that Apple’s anti-steering provisions, which prohibit app developers from directing users to external payment systems, violated California’s unfair competition law. The court also found that Apple’s App Store was a “unique” marketplace, which put it in a position of monopoly power.
The court’s decision could have far-reaching implications for the app industry and the wider tech industry. Apple’s App Store is a major source of revenue for the company, generating billions of dollars in sales each year. It also serves as a gatekeeper to the iOS ecosystem, allowing Apple to control which apps are available to users and how they are monetized.
The ruling will make it easier for developers to offer alternative payment methods in their apps, potentially reducing the amount of revenue that Apple earns from the App Store. It could also encourage other app store operators, such as Google, to rethink their own policies around in-app purchases.
The court’s decision is not the first time that Apple has faced criticism over its App Store policies. In recent years, several high-profile developers, including Spotify and Basecamp, have accused the company of anti-competitive behavior. They have argued that Apple’s fees and restrictions on app distribution give the company an unfair advantage over smaller competitors.
In response to the court’s ruling, Apple issued a statement saying that it was “disappointed” with the decision and that it would continue to defend its App Store policies. The company also emphasized that the ruling did not find that Apple was a monopoly or engaged in antitrust violations.
“Today, the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” the statement read. “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.”
Despite Apple’s protestations, the ruling could force the company to change its policies around in-app payments. This could be particularly significant for smaller app developers, who have struggled to compete with larger companies on the App Store. Apple is currently the most dominant player in the mobile app market and its presence has been particularly felt by indie developers.
The ruling could also have wider implications for the tech industry as a whole. It comes at a time when lawmakers and regulators around the world are scrutinizing the power of large tech companies and their impact on competition.
In the US, both the Department of Justice and the Federal Trade Commission are investigating Apple and other tech companies for potential antitrust violations. The EU has also launched several investigations into the practices of major tech companies, including Apple.
Overall, the court’s ruling represents a significant victory for app developers and advocates of greater competition in the tech industry. It remains to be seen how Apple will respond to the decision and whether it will lead to significant changes in the App Store ecosystem.
