- The Supreme Court ordered Apple to place links in apps to other payment options
- This move will cost Apple billions in revenue; last fiscal year it earned $85 billion
- READ MORE: The move is part of an antitrust lawsuit Epic Games filed in 2020
Apple could lose billions of dollars after the US Supreme Court ordered it to embed links in apps to other payment options.
The move follows a four-year legal battle with Epic Games, which sued the tech giant, claiming it had a monopoly over its digital services App Store.
When you download an app that has in-app purchases, the default payment method is through Apple Pay.
But under the new ruling, Apple would be forced to add another link at checkout that allows users to pay developers directly, avoiding the 30 percent fee the tech giant charges for such purchases.
Apple could lose billions of dollars after the US Supreme Court ordered it to embed links in apps to other payment options
The justices rejected Apple’s appeal of lower court rulings that found some App Store rules for apps purchased on more than a billion iPhones constitute unfair competition under California law. WHAT??
Apple charges a commission of up to 30 percent on in-app purchases, which accounted for $85 billion in revenue during the company’s last fiscal year that ended in September.
But now developers can guide users when purchasing items to avoid the fees.
The order appears to be a temporary move but will likely hit the tech giant’s revenue, which is expected to reach $182 billion this year and $207 billion by 2025, according to research firm Sensor Tower.
Epic, based in Cary, North Carolina, had alleged that Apple’s app store had turned into an illegal monopoly that stifled innovation and competition while generating billions of dollars in profits for Apple.
Although a federal judge rejected the claim that Apple had a monopoly on mobile apps, the judge concluded that consumers should have more freedom when paying in apps. Is this long-winded?
The ruling follows a four-year feud between the two companies.
In August 2020, Epic attempted to offer an alternative way to obtain its mobile app, in an attempt to circumvent Apple’s commissions charged when digital goods were purchased by players on Fortnite and other games.
Epic offered players coins to play Fortnite through its website and avoid Apple’s fees for in-app purchases.
Apple kicked Epic out of its app store after it tried to get around the restrictions.
The ruling follows a four-year feud between the two companies. In August 2020, Epic tried to offer an alternative way to get its mobile app, in an attempt to circumvent Apple’s commissions charged when digital goods were purchased by players on Fortnite and other games
In a statement, Apple said Fortnite was removed because Epic launched the payment feature with the “express intent to violate the App Store guidelines” after already having apps on the store for a decade.
However, the game maker retaliated with the lawsuit, but was not looking for money.
Instead, Epic wanted to put an end to many of the companies’ practices regarding their app stores.
“Apple has become what it once railed against: the behemoth that wants to control the markets, block competition and stifle innovation. Apple is bigger, more powerful, more deeply entrenched and more pernicious than the monopolists of old,” Epic said in its 2020 lawsuit, filed in the Northern District of California.
Although a federal judge rejected the claim that Apple had a monopoly on mobile apps, the judge concluded that consumers should have more freedom when paying in apps.
And while that change has been made, the company’s CEO doesn’t consider it a win.
“The Supreme Court has rejected both parties’ appeals in the Epic v. Apple antitrust case,” he shared on X.
The lawsuit to open iOS to competing stores and payments has been lost in the United States. A sad outcome for all developers.’