App Developers Can Now Direct Apple Users to 3rd-party Payment Services




Apple was in a legal battle regarding its policy that forced its users to accept payments only through the Apple payment system. A judge, however, ruled against Apple and in favour of the app developers, stating that Apple cannot force its users to exclusively use the company’s own payment system.

What this means is that moving forward, Apple can no longer impose a prohibition that dictates app creators to only accept payments from its system. App developers can now accept payments from options outside of the App Store.

In essence, an app developer could sell the product from the app store and then charge for in-app purchases from another means, like its own website. The player will log in to his account from the developer’s website and pay. From here, the developer will reflect the changes in the app or game in the player’s Apple device. 

This long and contentious battle came about between Apple and Fortnite, a popular video game that refused to be in shackles with Apple’s rules. What Fortnite wanted to do was to charge its consumers outside the Apple platform to avoid Apple’s selling fees.

Judge Yvonne Gonzalez Rogers ruled that Apple was in violation of California’s Unfair Competition Law. They broke it by forcing the game developer of Fortnite, Epic Games, to only charge its users for in-app purchases from the app store. 

When users make a purchase, Apple gets a 30% commission. This commission is applied to every purchase. The creators of Fortnite, apparently, did not like this. They violated this rule, and this violation led to Apple taking action. 

The judge issued an injunction stating that Apple can no longer prohibit game and app developers from putting links in their products leading to outside platforms or websites. 

Before this ruling, game developers, including those that power, could not ask their users to click on a link that would take them to a website or platform. It is part of Apple’s strategy to control where players can make purchases. 

The judge, however, did not say that Apple was doing a monopoly on the industry. She further stated that the evidence in the trial did not prove that Apple had a monopoly on a barrier to entry. The decision took a while months after the hearings began. Despite the long wait, Fortnite and other app developers view this as a success. Surely, Apple is going to appeal this decision to a higher court. However, the injunction is a victory to many. 

Because of this, Apple’s stock went down to nearly 3% in the midday of Friday when the ruling was announced. Apple, despite the injunction, said that it was still a victory for them. They stated in a press conference that it was a victory because they were able to prove that they were not monopolizing the system. 

Apple said in a statement that on the day of the verdict, the law affirmed what they had known all along, that Apple was not violating any antitrust law. They also said that Apple was constantly facing fierce competition, yet customers and developers choose them because they are the best.

Furthermore, they stated that the ruling was not a victory for developers or for consumers. They said that Epic Games was fighting for fair competition among payment methods. There are a billion consumers out there that do not have Apple Pay. Apple said that Epic would certainly come back to the App Store when there are more competitive payment processing options.

This entire issue started when Apple removed Epic’s Fortnite game from the App Store. Apple did it because Epic was in violation of Apple’s rules. Specifically, Epic was charging its consumers outside the Apple platform. 

Epic encouraged its players in the iOS platform to buy its own digital currency that they call V-Bucks directly from Epic’s website. They also offered a discount to people who would do this outside the Apple platform. Consumers did this, and once they had the V-Bucks reflected in their accounts, they could use the currency to buy in-game materials. As such, Epic undercut Apple’s earnings. 

In the lawsuit, Epic claimed that Apple was a monopoly. They said that Apple was harming competition by prohibiting developers from using other payment methods and that Apple was monopolizing its hundreds of millions of users. Apple kicked out Epic from the App Store, and then Epic filed a lawsuit. It appears that the lawsuit was premeditated. The trial began in May, and it lasted for a month.