Landmark breach in Apple walled garden on payments; stock dented ahead of Sep 14 event

A US court on Friday tore down some of Apple’s key restrictions on how its developers can collect payments within the apps.

The decision strikes down a core part of Apple’s App Store money machine.

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 contact information that the developer obtained when customers signed up within the app.

This ban has been struck down.

The landmark case was agitated before Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California.

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.

The ruling comes awkwardly ahead of Applea¿s marquee event next week where versions of Apple’s winning products are slated for unveiling.

Epic Games is best known as the maker of Fortnite, a wildly popular video game played by about 400 million people worldwide. 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, where he conceded that allowing links within apps to other payment options would undercut his profits.

(Nikhila Natarajan is on Twitter @byniknat)