Key Sentence:
- Dealt a heavy blow in its ongoing lawsuit against Fortnite maker Epic Games.
- In Oakland, California, a court ruled that Apple could not prevent app developers from referring consumers to third-party payment options.
Apple claims that all apps must use their payment options in the Apple app. Epic Games disputed the 30% discount that Apple gave on purchases in a high-profile process – claiming the App Store was a monopoly. On Friday, Judge Yvonne Gonzalez-Rodgers ruled that “the court cannot conclude that Apple is a monopoly.”
However, it has also issued a permanent ban saying Apple can no longer prohibit developers from connecting to their buying mechanisms. For example, movie streaming services can now instruct customers to subscribe via. Their website without using the purchase mechanism in Apple’s apps.
Epic is also suing Google over its Play Store.
Closed payment system is hugely lucrative for the tech giant. Though the company says it doesn’t know exactly how much it does. The decision states that Apple cannot prohibit developers from communicating with customers. There are often cheaper options for consumers outside of app stores, but Apple doesn’t allow the company to tell consumers that.
Epic argues that this is unreasonable, and developers should let users know they can shop outside of the app store. However, as a victory for Apple, the judge also ruled that Epic could not prove that Apple operated with an illegal monopoly. Judge Yvonne Gonzalez-Rodgers said, “Apple has a significant market share of more than 55% and a very high-profit margin.”
But he adds, “These factors alone do not indicate antitrust behavior. Success is not illegal.” An Apple spokesperson said: “Today, the court confirmed what we’ve always known. The App Store does not violate antitrust laws. Music streaming site Spotify said, “We are pleased with Apple’s [decision] to commit to anti-competitive behavior and permanently ban its anti-government regulations.”
The decision also shows that gaming apps account for 70% of app store revenue. The decision is likely to be contested, possibly by both sides. Apple’s share price has fallen 3% since the decision, removing billions of dollars from its valuation.