Login | July 27, 2024
Supreme Court might have just cost Apple billions
RICHARD WEINER
Technology for Lawyers
Published: February 16, 2024
Well, boo-hoo.
The United States Supreme Court recently upheld a lower court ruling about Apple’s app store payments that might cost the company a few billion, give or take.
The recent ruling is a part of the ongoing and long-running litigation between Apple and Epic Games, maker of the billion-dollar Fortnite game platform, and allows a lower court ruling about in-game payments to stand.
The lower court had held that app developers could insert links to alternate payment methods from Apple’s app payment system.
The ruling covers all US app makers who have in-app payments on the Apple platform.
In a nutshell, app developers paid a commission to Apple for using their app payment platform of 15-30% and did not allow any other method of processing in-app payments.
he lower court ruling, which now takes effect, allows developers to use other payment platforms (like PayPal, Venmo, etc.).
This ruling also follows the failure of Epic’s antitrust suit (and subsequent appeals) against Apple. But it’s still a big win for the game maker.
Apple had a technical response already ready in case they lost at the Supreme Court, but it may or may not conform to the ruling.
Apple announced, concurrent to the Supreme Court ruling, that they would take a 12-27% commission anyway from any alternate payment method.
Apple also announced that there would be a potentially complicated approval process for any alternate payment method, for “security” reasons. Apple also plans to impose a “scare screen” when anybody clicks on an app with an alternate pay link that Apple is not responsible if anything goes south during the alt pay process.
Epic’s CEO Tim Sweeney wasn’t impressed or very happy, stating that Apple was engaging in “bad-faith compliance” and said that Apple’s proposed revisions remain anti-competitive.
Apple has pretty good reasons to try to maintain a commission on in-app charges. They are a large part of their service division’s income, which totaled $85 billion in income last quarter.
Yep. $85 billion last quarter. Wouldn’t only want to pull in only $84 billion next quarter, would we?
I wish this was the last we would hear about this case, but it won’t be. We’ll let you know how the courts take this offer from Apple. You can probably guess the outcome.
Thanks to AP for the original reporting.