The US Supreme Court has rejected Apple’s challenge to App Store payments

The US Supreme Court on Tuesday allowed an order to go into effect that could reduce Apple’s control over its lucrative iPhone app store, potentially depriving one of the world’s most profitable companies of trillions of dollars in revenue. .

The justices rejected Apple’s appeal of a lower court’s ruling that the Apple store governs covering applications purchased on over 1 billion iPhones constitute unfair competition under California law.

The appeal stems from an antitrust lawsuit filed in 2020 by Epic Games, maker of the popular video game Fortnite. Epic lost the general lawsuit accusing Apple of they violate federal antitrust law, and on Tuesday the judges also rejected the appeal.

But in rejecting Apple’s attempt to maintain sole control over in-app payments, the court lifted a stay on an order that allows U.S. app developers to add links to payment options other than their own in iPhone apps. This change would allow developers to avoid paying fees to Apple, they range from 15% to 30%.

Such fees have become an important part of Apple’s services division, which generated $85 billion in revenue in its latest fiscal year, which ended in September. The prospect that consumers may use other payment channels to make transactions from apps is one of several factors influencing Apple shares, which are down 5% so far this year.

The legal battle against Epic

This reduction allowed Microsoft, Apple’s arch-rival, to overtake it as the most valuable company. Apple shares fell 2% in afternoon trading Tuesday, leaving the company with a market value of approximately $2.8 trillion. Microsoft, whose shares have risen 3% this year, is valued that way 2.9 trillion dollars.

Epic claimed that Apple’s App Store has become a monopoly that inhibits innovation and competition while generating billions of dollars in profits for Apple. Although a federal judge rejected the claim that Apple had a monopoly on mobile apps, he ruled that consumers should have more freedom in deciding how to pay from apps.

Apple did not immediately respond to a request for comment on the Supreme Court’s rejection or how it will implement the ruling. September 2021issued by District Judge Yvonne Gonzalez Rogers.

On Tuesday, Epic CEO Tim Sweeney called the Supreme Court’s rejection “a sad outcome for developers,” even as he applauded the prospect of allowing consumers to get “better prices on the web.”

In August 2020, Epic tried to offer an alternative to getting its app, in an attempt to circumvent the fees that Apple charges when players purchase digital products from Fortnite and other games.

Apple banned Epic from its app store when it tried to circumvent the company’s restrictions.

Although Epic lost most of its lawsuits in the Apple case, last month it won a lawsuit against Google and its app store for Android phones, known as the Play Store, in a case nearly identical to its lawsuit against Apple. A federal judge has yet to determine what changes Google will have to make to its Play Store.