According to a federal court, Apple’s authority over its Software Store has suffered a major blow, providing businesses with a method to avoid paying Apple a share of their app sales and possibly upending a $100 billion online industry.
Apple relies on income from its App Store to fuel its massive profits, and the company’s move may have a negative impact on that revenue. For the corporation, it was a humiliating setback at a time when it was facing a growing number of tough questions about its operations from authorities and politicians across the globe.
According to analysts, the decision may have a significant impact on the economics of a $100 billion online industry. It is also a huge blow for Apple, which relies on income from the app store to fuel its massive earnings. It is the latest, but possibly most devastating, setback for the corporation, which has been subjected to increasingly sharp inquiries about its operations from authorities and politicians all around the globe in recent years.
The injunction was issued as part of a landmark judicial decision in a high-profile legal dispute between Apple and Epic Games, the developer of the famous video game Fortnite, which sued Apple last year over the company’s app store rules.
According to the ruling, Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California found that Apple had violated California’s anti-unfair competition laws by prohibiting app developers from directing customers to alternative payment methods for their products and services. Apple must begin allowing developers to add links to alternative payment methods in their applications within 90 days, according to the judge. Apple may attempt to have the injunction revoked before that time.
That implies that when consumers sign up for a subscription or purchase a digital service or item via an iPhone app, businesses may now direct those customers to third-party websites to finish the purchase or transaction. That would enable such businesses to avoid paying Apple’s fee on the sale, which may be as much as 30 percent depending on the transaction.
