Supreme Court Decision Shakes Up Apple's App Store, Opens Door for Cheaper App Purchases

Apple Inc’s AAPL appeal in an antitrust lawsuit regarding its App Store has been rejected by the U.S. Supreme Court, a decision that could notably affect the tech giant’s revenue. 

The case, which also involved Epic Games Inc, the creator of Fortnite, sought the Supreme Court’s intervention, but the justices declined both appeals without explanation.

This rejection means that a 9th US Circuit Court of Appeals ruling will come into effect, Bloomberg reports. 

The ruling found that Apple’s restrictions on developers, specifically limiting their ability to inform users about alternative payment systems, breached California’s Unfair Competition Law. 

Developers can now direct iPhone users to more cost-effective purchasing options outside of Apple’s system. 

This is particularly significant as Apple has charged up to 30% commissions for transactions made through its App Store.

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The appeals court’s decision permits developers to circumvent these commissions by embedding links in their apps for processing payments on the web instead of within Apple’s system. 

This change, previously on hold pending the Supreme Court’s decision, will now advance following the court’s refusal to take up Apple’s appeal.

Apple and Epic Games filed appeals against a 2022 court decision that cleared Apple of being an antitrust monopolist. 

The judge in the case had declared Apple’s “anti-steering” provisions illegal. This legal battle originated when Apple expelled Fortnite from its App Store due to Epic’s attempt to circumvent Apple’s 30% fee on in-app payments by using its payment system.

In 2020, Epic Games filed a lawsuit against Alphabet Inc GOOG GOOGL  Google, accusing the tech giant of abusing its market dominance to strike deals with phone manufacturers and impose additional fees on consumers. 

Epic Games attempted to bypass Google’s 15% to 30% commission on digital purchases by enabling direct in-game transactions in Fortnite. 

This action led to Google removing Fortnite from its store, which triggered the lawsuit.

Price action: AAPL shares traded lower by 1.80% at $182.58 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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