A federal judge on Friday said Apple could no longer prevent alternatives to its in-app payment system. The ruling lets companies avoid Apple’s commission of up to 30% on some app sales. Developers will drop prices now that their App Store fees have been reduced, predicted Joe Sandin, the CEO of app developer Onsharp. “It will create e-commerce opportunities where none existed before because app developers will now be providing more ways inside their apps for consumers to buy,” he told Lifewire in an email interview.
Apple Gets Rebuked
Federal judge Yvonne Gonzalez Rogers said that Apple had violated California’s Unfair Competition Law by making Fortnite and its maker, Epic Games, use Apple’s payment systems on the App Store. Gonzalez Rogers issued an injunction saying Apple can no longer prohibit developers from adding links within their apps to outside payment options. Other options for payment include a subscription on a web browser, rather than through the app. But the judge rejected the suit’s other claims and said she could not conclude that the iPhone maker is a monopoly. “Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” court documents read. “Success is not illegal.”
Discounts for Users?
Not everyone agrees that discounts are inevitable due to the ruling. App Store prices might actually increase, David Brittain, the CEO of app developer TopHatch, told Lifewire in an email interview. “Larger developers will benefit from higher revenue, but mid and smaller developers will lose out,” he said. “Those larger developers will likely cut prices initially to beat the smaller developers, but ultimately reduced competition will lead to higher prices.” Anat Alon-Beck, a law professor at Case Western Reserve University who researches corporate law and entrepreneurship, told Lifewire in an email interview that the ruling doesn’t go far enough in regulating Apple’s role as both a platform manager and a competitor in the app marketplace. “Apple can offer discounts to customers to continue to use Apple infrastructure,” she said. The ruling will let developers enable small payments for apps or added features for lower prices than Apple, which had mandated that the smallest payment could be $0.99, David Finkelstein, the CEO of BDEX, a marketing data exchange, told Lifewire in an email interview. Security is another concern now that payments could go through systems not controlled by Apple, Brittain said. “Apple already struggles to keep out the bad guys with high price subscriptions for low-value features, but at least you can appeal to Apple and get refunds,” he added. “If the billing is outside the store, then the security of their personal data (payment details, etc.) and privacy are at risk, and there will be no recourse to Apple.” “I am concerned about privacy and security,” Alon-Beck said. “My credit card was just breached this weekend, and someone has been using it to buy very expensive things. Even after I canceled the card and before I got a chance to get my new card, the hackers got hold of the new credit card info through my digital wallet.” It’s not clear how consumer data can be protected under the new ruling, Alon-Beck said. “We want transactions to be quick and cheap on the one hand, and enjoy security on the other, so what’s going to give?” she asked rhetorically. “Can we have it all?”
