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With Apple's Outside Payments Prohibition Affirmed As Illegal, NFTs and Cryptocurrency Are Certain to Win

2023-04-26 17:14:55

Developers are permitted to divert app users to their own systems for purchases unless Apple files an appeal and has the decision reversed.


Apple was found to have broken California state competition rules when it forbade app developers from utilizing any other in-app payment options save its own, which charged a 30% fee. The ruling may open the door for projects working with cryptocurrencies and non-fungible tokens (NFTs) to expand the features of their iOS apps.

The United States Court of Appeals for the Ninth Circuit issued its decision on April 24 in the dispute between Apple and Epic Games, the company behind the online game Fortnite. The court said that Apple's anti-steering clause hurt Epic, and confirmed the ruling of a lower court from 2021. Apple's anti-steering policy prohibits iOS developers from distributing information about outside-of-app purchase options through certain channels, such as in-app links. According to the court, the policy increased the prices of the applications made by Epic's subsidiaries that are still available on Apple's App Store and discouraged other app users from purchasing Epic Games.

On April 24, Tim Sweeney, the creator and CEO of Epic Games, tweeted that the decision "frees iOS developers" by enabling them to point users to different payment options. While the court sided with Apple on the majority of points, the tech giant was unsuccessful in its claim that Epic Games shouldn't be subject to the anti-steering clauses because Apple canceled Epic Games' iOS developer account in August 2020.

Tweet by Tim Sweeney

By using the "tethering test" for rival lawsuits and the "balancing test" for consumer lawsuits, the court determined that Epic Games would have made more money since then if Apple's policy hadn't been in place and found the anti-steering clause to be unfair under both standards. The court found that customers would have gone straight to Epic Games if they had known about its substantially lower commission rate of 12%, as opposed to Apple's 30%, as a second explanation for Apple's anti-steering breach.

‘’If consumers are aware of reduced app prices, which are made feasible by developers' decreased expenses, and are able to do so, they will migrate to platforms with cheaper prices, increasing the amount of money the Epic Games Store makes.’’ The decision, ‘’if Apple does not appeal it, may establish a legal precedent that will be advantageous to developers of crypto and non-fungible token apps as they will not be subject to Apple's 30% "tax."

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