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Judge's App Store Ruling a Blow to Apple

Restrictions have been loosened—good news for app developers, and possibly consumers
By Newser Editors and Wire Services
Posted Sep 10, 2021 12:26 PM CDT
Judge's Ruling Bad News for Apple, Good News for App Makers
In this Feb. 5, 2021, photo, an Apple store employee is shown in New York.   (AP Photo/Mark Lennihan)

(Newser) – A federal judge ordered Apple to dismantle part of the competitive barricade guarding its closely run App Store, threatening one of the iPhone maker's biggest moneymakers. It could potentially also save app developers billions of dollars that could encourage them to lower the prices paid by consumers, per the AP. The challenge was mounted by North Carolina-based Epic Games, best known as the maker of Fortnite, the popular video game played by about 400 million people worldwide. The legal battle targeted commissions of up to 30% that Apple has been charging on digital transactions within apps.

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Such transactions can include everything from Netflix or Spotify subscriptions to the sale of digital items such as songs, movies, or virtual tchotchkes for video games. Epic cast that highly lucrative fee as a price-gouging tactic that wouldn't be possible if competing stores were allowed to offer iPhone apps. The 185-page ruling issued Friday by US District Judge Yvonne Gonzalez Rogers comes three months after the conclusion of a trial focused on one of the pillars holding up Apple's $2 trillion empire—one that Apple's late co-founder Steve Jobs began to shape 20 years ago.

Since that trial ended, Apple has taken two steps to loosen some of its App Store rules—one to settle a lawsuit and another to appease Japanese regulators without altering its commissions. Those concessions make it easier for many apps to prod their users to pay for digital transactions in ways that avoid triggering Apple's fees. Apple shares dipped sharply immediately upon the issuance of the ruling and was trading down 3% Friday. An appeal of the ruling by one or both companies seems likely.

(Read more Apple stories.)

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