SAN RAMON, Calif. (AP) – – A federal judge ordered Apple to dismantle part of the competitive barricade that kept its tightly-managed app store, threatening one of the iPhone maker’s biggest money-makers . It could also save app developers billions of dollars, which could prompt them to lower the prices paid by consumers.
The challenge was taken up by Epic Games, better known as the creator of Fortnite, the popular video game played by around 400 million people around the world. Apple shares fell sharply immediately after the decision was released and were trading down 3% on Friday. Epic, based in Cary, North Carolina, is privately held.
The legal battle was aimed at commissions of up to 30% that Apple was charging on digital transactions within apps. These transactions can include everything from Netflix or Spotify subscriptions to the sale of digital items such as songs, movies, or virtual tchotchkes for video games.
Epic touted the lucrative fee as a price-hike tactic that wouldn’t be possible if competing stores were allowed to carry iPhone apps.
An appeal of the decision by one or both companies seems likely.
U.S. District Judge Yvonne Gonzalez Rogers’ 185-page ruling on Friday comes three months after the conclusion of a trial focused on one of the pillars of Apple’s $ 2 trillion empire – one that the Apple’s late co-founder Steve Jobs began shaping 20 years since.
Since the end of that lawsuit, Apple has taken two steps to relax some of its app store rules – one to settle a lawsuit and another to appease Japanese regulators without changing its commissions. These concessions make it easier for many apps to trick their users into paying for digital transactions so that they don’t trigger Apple’s fees.
Now Gonzalez Rogers is ordering Apple to take it a step further by allowing developers to place links and buttons for other payment options right inside an app, something Apple has long resisted to protect its App Store commissions. Apple also maintains that blocking other payment links in apps helps protect the security and privacy of people using its iPhones, iPads and iPods.
Copyright 2021 The Associated Press. All rights reserved.