Federal Court Orders Apple to Overhaul App Store Commission Practices
In a landmark ruling, a federal judge has mandated that Apple must significantly alter its App Store policies, concluding a five-year antitrust battle initiated by Epic Games. Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California accused Apple of flouting previous court orders, criticizing CEO Tim Cook and other executives for dishonesty.
The case centered on Apple’s commission structure, which required app developers to utilize its payment system, imposing a hefty 30% fee on transactions. The judge’s earlier ruling permitted apps to link users directly to external payment options, potentially circumventing the commission—but Apple responded by instituting a new, lower 27% fee and implementing measures that dissuaded users from making external purchases.
Judge Gonzalez Rogers wrote, "Apple sought to maintain a revenue stream worth billions in direct defiance of this court’s injunction." She ordered that Apple could no longer charge commissions for sales made outside of the App Store and prohibited the company from implementing rules that deter developers from offering alternate payment methods. Furthermore, she encouraged an investigation into Apple’s potential criminal contempt.
This decision represents a significant victory for Epic Games, shifting the balance of power in the app economy and allowing developers to retain more revenue. Tim Sweeney, Epic’s CEO, hailed the ruling as “wonderful” for both developers and consumers.
In response, Apple vowed to appeal, expressing strong disagreement with the ruling. The company’s shares declined by 1.5% in after-hours trading, reflecting investor concerns over the impact on its revenue, which largely comes from the App Store’s lucrative services segment, contributing significantly to its annual profits of nearly $100 billion.
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