California Judge orders Apple to relinquish its payment systems


Photo: AFP / Josh Edelson

A US judge ordered Apple to relinquish control of its App Store payment system on Friday, a setback to the global tech giant triggered by its antitrust lawsuit with Fortnite creator Epic Games.

Apple will no longer be able to force developers to use its tightly regulated sales mechanism, in a decision that has the potential to significantly change the digital economy.

It's a move that app developers have been clamoring for due to the up to 30% fee on purchases, but the court also decided that Epic had failed to establish its allegation of illegal monopoly, prompting Apple to breathe a sigh of relief.

Lawsuits, rulings, and investigations have piled up for the iPhone manufacturer, but it was hesitant to challenge the judgment, instead praising the anti-trust component, saying, "We consider this a major success for Apple."

Epic, for its part, described the ruling as a defeat for app developers who rely on the App Store in the multibillion-dollar mobile game business, as well as for users.

"We will fight on," Epic CEO Tim Sweeney said on Twitter, and a business spokeswoman subsequently confirmed the company will file an appeal.

According to the ruling issued on Friday, Apple is permanently banned from preventing developers from inserting "external links or other calls to action that drive customers to purchasing mechanisms" in their apps.

"Apple enjoys a considerable market share of over 55 percent and extraordinarily high-profit margins... (but) Success is not illegal," California federal Judge Yvonne Gonzalez Rogers wrote.

"Epic Games failed in its burden to demonstrate Apple is an illegal monopolist," she added.

However, the ruling stated that Apple breached California's anti-unfair competition statutes.

In a lawsuit, the two companies argued over whether Apple had the authority to set ground rules, regulate payment methods, and remove non-compliant applications from its store.

Apple's share of income from iPhone applications, which could go as high as 30%, was also at stake.

Fortnite was removed from Apple's online mobile marketplace after Epic published an upgrade that avoided revenue sharing with the iPhone manufacturer.

However, even before Friday's ruling, Apple began to relinquish its App Store dominance, notably in a deal with Japanese authorities.

It also has to contend with legislation passed by South Korean lawmakers that prohibits Apple and Google from requiring app developers to utilize the internet giants' payment systems.

Publish : 2021-09-11 11:42:00

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