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Supreme Court Rejects Apple’s Appeal, Paving the Way for App Store Payment Revolution

 |  January 16, 2024

The United States Supreme Court has refused to hear Apple’s appeal in the much-publicized 2021 legal battle against Epic Games. The outcome of the trial, which initially saw Apple victorious on most counts, includes a crucial modification to Apple’s App Store policies.

According to Bloomberg, the presiding judge ruled that Apple must relax its App Store anti-steering policy, allowing developers like Epic Games to include links to alternative payment systems within their apps. This decision was delayed as Apple submitted an appeal to the Supreme Court, a move that has now been rejected, affirming the original ruling.

Apple’s App Store has been under increasing scrutiny in recent years, with regulators targeting the tech giant’s perceived monopolistic control over the iPhone software ecosystem. Currently, Apple imposes a 15-30% commission on all purchases made through its In-App Purchase system, compelling developers to use this system exclusively and prohibiting them from informing users about alternative payment methods.

With the court decision, developers are now permitted to inform users about alternative payment options, providing a direct link to their apps’ websites. Opting for alternative payment methods could enable developers to retain more revenue, bypassing Apple’s commission fees.

Read more: US Court Denies Apple, Epic Rehearing Appeal Of Antitrust Ruling

However, the implementation of this decision may not be without complications. Apple may still require developers to share commissions, as seen in the Netherlands, where dating apps can use alternative payment methods but are still obligated to pay a 27% commission equivalent to Apple’s cut of revenue, reported Bloomberg.

While governments have deemed it illegal for Apple to force In-App Purchases on developers, there is no explicit prohibition against Apple collecting commissions through other means. In the European Union, the Digital Markets Act set to take effect this spring will introduce even more substantial changes to Apple’s App Store operations. The DMA mandates Apple to allow the installation of apps from sources outside the App Store on iOS, potentially allowing these apps to circumvent Apple’s established rules.

As the legal landscape evolves, Apple and developers face a shifting paradigm in the App Store ecosystem, raising questions about the future of app distribution and monetization.

Source: Bloomberg