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Friday, April 19 2024
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Apple’s walled garden breached; stock dented ahead of Sep 14 event

Apples walled garden breached
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New York: A US court on Friday struck down a core part of Apple’s walled garden around its App Store money machine. It tore down some of Apple’s key restrictions on how its developers can collect payments within the apps.

The anti-trust ruling came thanks to Epic Games.

Hereon, Apple cannot bar developers from directing customers to pay outside of Apple’s own in-app purchase system.

Apple can appeal.

It presently charges developers commissions up to 30 per cent.

Apple also bans a developer from communicating with customers via the contact information that the developer obtained when customers signed up within the app.

The court struck down this ban

Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California decided the landmark case.

Apple shares dropped about 2.5 per cent.

Rogers’ order, applicable across the US, now allows developers to put “buttons, external links, or other calls to action that direct customers to purchasing mechanisms.”

On its part, Apple punctured Epic’s plea that the iPhone is opened up to third-party app stores.

Epic, the judge stated, failed to demonstrate Apple is an illegal monopolist.

Apple’s winning products will be unveiled in the Apple Marquee event slated for Sep 14

Fortnite, a wildly popular video game played by about 400 million people worldwide is made by Epic Games. Epic made the case that Apple’s fees are the price-gouging tool of a monopoly hatched within the “walled garden” built around the iPhone, the app store, software and other devices such as the iPad and iPod.

Apple’s commissions mirror those charged on in-app commissions by the app store feeding about 3 billion devices powered by Google’s Android software, as well as major video game consoles – PlayStation, Xbox and Switch.

Earlier this year, Rogers grilled Apple CEO Tim Cook for four hours. He conceded that allowing links within apps to other payment options would undercut his profits.

By Nikhila Natarajan

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