Apple loses the court battle to Epic Games on a ‘crucial front’

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Sep 10, 2021
  • U.S. Court bars Apple from restricting developers to its ecosystem for payments.
  • The Verge's editor-in-chief discusses the ruling on CNBC's "TechCheck".
  • Shares of the iPhone maker are down about 3.5% on Friday.

Apple Inc (NASDAQ: AAPL) can no longer restrict developers to its own ecosystem for payments and communication with customers, a U.S. judge ruled this morning on Epic Games’ antitrust lawsuit against the iPhone maker.

The injunction comes after a 3-week trial in a U.S. District Court before Judge Yvonne Gonzalez Rogers in May.

Apple’s App Store sales could take a hit

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Before Friday’s ruling, developers were bound to use Apple’s proprietary system to collect payments from customers for in-app purchases, with the tech giant snapping an up to 30% commission on it.

Judge Rogers, however, made Apple dissolve such restrictions on Friday, enabling developers to use links within their apps that take customers out of Apple’s ecosystem to subscribe to or purchase digital content.

The verdict also said that Apple can no longer restrict developers from communicating with customers directly, using the contact information obtained when they signed up on the app.

The “Fortnite” creator’s victory could hurt Apple’s App Store sales, which generated roughly $64 billion last year.

The Verge’s editor-in-chief sees it as an opportunity for Apple

The Verge’s Nilay Patel sees today’s ruling as a major loss for Apple but said it could also be a “huge opportunity” for the tech giant. On CNBC’s “TechCheck”, he said:

“It’s a huge loss for Apple in the narrow sense that the app store revenue model is under threat. 30% cut, particularly from games, is the driver of Apple’s services business. But fundamentally, Apple has a huge opportunity to monetise other parts of the app store ecosystem. If this spurs them to do that, it will be a win in the long-term for that business.”

Apple shares are down about 3.5% on Friday, hitting its market cap by roughly $87 billion.

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