Saturday 11 September 2021 10:47 am

Apple sales worth billions of dollars at risk after App Store ruling

Apple has been declared “anticompetitive” by a US judge who has ruled that the tech giant must let developers use alternative payment methods, according to widespread reports.

Judge Yvonne Gonzalez Rogers said Apple “engaged in anticompetitive conduct” by stopping apps from using payment methods other than its own, which charges fees of up to 30 per cent, according to The Telegraph.

Judge Rogers said that Apple’s rules “hide critical information from consumers and illegally stifle consumer choice” but stopped short of deeming Apple a monopolist, a ruling which would likely have resulted in tougher penalties.

Shares in the tech titan were down 3.3 per cent as of this morning, following news of the ruling.

The landmark ruling against the tech giant also represented a win for Epic Games, the creator of the popular video game Fortnite, who brought the case against Apple in August 2020 after being kicked off the app store for flouting the rules which allowed Apple to take a cut of its in-app payments.

Currently iPhone and iPad users can only use the App Store to download games, apps or stream services.

Similarly the developers of such apps are, at present, limited to only take payments via the App Store too, enabling Apple to take a fee between 15-30 per cent of in-app purchases, of which there are billions.

Apple’s controversial fees led to a revolt from many developers who argued that the fees, and the ban on using any other payment methods, was akin to a tax on developers.

The ruling means that, going forward, Apple must allow developers the ability to direct users to other payment methods when making in-app purchases and thereby evade Apple’s fees.

“Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.” an Apple spokesperson told City A.M.

“As the Court recognised, ‘success is not illegal’,” Apple added, referring to the fact that the App Store was not found to be in violation of antitrust law.

In a media conference Apple’s General Counsel Kate Adams called the verdict a “resounding victory” for the company. She said: “We are still analyzing the decision which is 180 pages long but the headline is that Apple’s app store business model has been validated.”

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