Apple has suffered a legal setback after a California court ruled that the tech giant violated state competition laws by barring app developers from using alternative in-app payment methods other than its own, which comes with a 30% commission. The United States Court of Appeals for the Ninth Circuit upheld a lower court decision in the case of Apple vs Epic Games, the creator of the video game Fortnite. The court said that Apple’s anti-steering provision, which prevents iOS developers from communicating out-of-app payment methods through certain mechanisms such as in-app links, harmed Epic Games.
The ruling may have a significant impact on the cryptocurrency and non-fungible token (NFT) sectors, allowing projects to add more functionality to their iOS apps. This is because, unless Apple appeals the decision and has the ruling overturned, developers are now free to direct app users to their own systems to make purchases, circumventing Apple’s 30% “tax”. The ruling could set a case law precedent benefiting creators of crypto and NFT apps.
Tim Sweeney, the founder and CEO of Epic Games, welcomed the ruling, saying it “frees iOS developers” by allowing them to direct consumers to alternative payment solutions. However, the court ruled in favor of Apple on most issues and rejected the company’s argument that the anti-steering provisions shouldn’t apply to Epic Games because it terminated Epic Games’ iOS developer account in August 2020.
The decision has raised concerns about Apple’s monopoly power in the app marketplace and the potential impact on the emerging metaverse, where virtual worlds and cryptocurrencies converge. The metaverse has been hailed as the future of the internet, but its success depends on a decentralized and open ecosystem, free from the control of any single company or government.
It could also have implications for the European Union’s recent anti-monopolistic rules that require Apple to permit third-party app stores on its devices, allowing consumers to circumvent Apple’s 30% commissions. However, Apple has already interfered with NFT transactions sent on Coinbase’s self-custody wallet, claiming that it’s entitled to “collect 30% of the gas fee” through in-app purchases.
The court’s decision is a significant development in the ongoing battle between app developers and Apple over the company’s App Store policies. It remains to be seen how Apple will respond and whether it will appeal the ruling. However, the ruling is likely to have far-reaching implications for the app marketplace and the future of the metaverse.