The Hustle

The Apple vs. Epic ruling, explained

A federal judge ruled that Apple is *not* a monopolist. But, now, the iPhone maker has to allow developers to steer their users to other payment options.

Last August, the creator of “Fortnite” (Epic Games) sued Apple over its App Store payment policies.

Specifically, Epic wanted to sell digital goods within its own game without having to pay Apple’s 30% in-app purchase commission.

On Friday, a federal judge issued a ruling on the case

And the iPhone maker won out on one major point: Epic could not prove that Apple is a monopolist in relation to its App Store. However, another decision could put billions of Apple’s profits at risk.

A court injunction, which takes effect in 90 days, will stop Apple from blocking developers “from steering their users to third-party payment options,” per Polygon.

Apple’s App Store profit…

… may have reached $15B in 2020, which is >20% of the company’s entire profit, according to trial details reported by The Information.

Other highlights from the judge’s 185-page ruling:

The App Store money train will slow…

… if enough apps route their payments away from Apple’s 30% tax. Developers still can’t make their own payment service within apps, and there’s no guarantee users will leave the App Store to make a payment.

However, shares for game maker Zynga (+6%) and subscription dating firm Match Group (+4%) gained on the ruling as investors eye larger App Store takes.

Apple’s stock fell 3% on the ruling, knocking $80B off its market cap. No one is crying for the company, though… It’s still worth ~$2.5T.

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