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How will a Lawsuit Might Change How You Buy Things on Your Phone – Guide
Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California rendered a ruling in the Epic Games v. Apple that has the potential to bring changes to the App Store.
The way you buy things inside apps on your iPhone, like news subscriptions or an exclusive dance move on Fortnite, is about to change.
Last week, Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California rendered a ruling in the Epic Games v. Apple that has the potential to bring real change to the App Store.
But the decision, which pitted Cary-based Epic against the world’s biggest technology company, is far from resolved.
All of this stems from Epic’s decision in August 2020 to put an alternative payment system on the iPhone and Android versions of its popular game, Fortnite – a move that allowed the company to bypass the 30% in-app purchase fee charged. by Apple and by Google. Previously, every time a player purchased a new costume, weapon or dance move from Fortnite on the iPhone or iPad, Apple took 30% of the money.
Apple and Google then kicked Fortnite out of their respective app stores, leading Epic Games to sue both companies for violating antitrust laws in the way they operate their app stores.
The judge’s decision must take effect within 90 days unless a higher court steps in and changes things.
On Sunday, Epic Games asked a higher court to review Gonzalez Rogers’ decision, filing an appeal in the US Court of Appeals for the Ninth Circuit.
So it may take some time before these changes are over. up taking effect.
Here’s what you need to know about the aftermath of Epic Games vs. Apple.
What was the decision?
In the 185-page judgment of Epic’s lawsuit, Gonzalez Rogers (the lawsuit was not heard by a jury) ruled that Apple can no longer block developers from communicating alternative payment options to customers outside the App Store.
This is a change from the way the App Store has operated since its inception. The iPhone maker has historically barred developers from telling customers that they can pay for in-app items, such as subscriptions or virtual currency in a video game, outside of the app itself.
Apple did this because it takes a 30% cut – a 15% cut for some smaller developers – from all purchases made within an app and forces developers to use Apple’s own payment system.
Gonzalez Rogers’ decision means developers now have more power to tell users how to pay for things outside the app.
However, Epic’s biggest sticking point — that Apple operates the App Store as an illegal monopoly — was denied by Gonzalez Rogers, who said the video game maker has not proved it in court.
“Although the Court finds that Apple has a sizable market share of over 55 percent and extraordinarily high profit margins, these factors alone do not show antitrust conduct,” she said. “Success is not illegal.”
What does the decision mean about how I use apps?
While the way you download apps won’t change, be prepared for more app notifications asking you to pay for things outside of the App Store.
The decision means, for the first time, that when you’re buying something within an app, developers can now tell you that you don’t have to pay for it through Apple’s payment system.
In fact, they will probably tell you that you can buy it cheaper using a different payment system, because it will no longer be subject to a 30% fee. However, you will need to go to a website outside of the app to complete the payment.
A potential quirk revolves around the definition of what a “button” It’s.
Gonzalez Rogers’ decision states that Apple cannot prohibit developers from including “buttons, external links, or other calls to action that direct customers to purchase mechanisms. ”
That leaves a lot of gray area that Epic has already drawn attention to. Could Epic put a button inside Fortnite that opens its own in-app payment system? Or Apple can ban this and force buttons direct customers to a website outside the app?
Expect this distinction to be decided in court.
Will Apple make additional changes to the App Store?
It remains to be seen how Apple will react to this decision. Apple has yet to give an indication of what it plans to do.
The company can lower fees to keep people using Apple’s payment processor, or it can decide to wait and bet that most customers will continue to pay the old-fashioned way.
Or it could just impose the 30% fee on a different part of the App Store, such as by using the development tools it makes available to app makers.
So who’s to say they won the lawsuit?
Both sides can claim at least a partial victory, while being upset about the decision.
One of the main rules of Apple’s App Store was outlawed and could lead to the removal of a smaller portion of the money from the App Store, a business that grosses more than $19 billion annually, according to Sensor Tower, a data company that tracks app stores.
In addition, Epic’s lawsuit showed that 70% of App Store revenue came from gaming apps. If gaming apps, many of which are free and earn money from in-game purchases, convince users to pay for it outside of the app, it could hurt Apple’s bottom line.
On the other hand, Apple now has a major court ruling saying it is not a monopolist.
“Today the Court affirmed what we’ve always known: the App Store does not violate antitrust law,” the company said in a statement. “…Apple faces stiff competition in every segment in which we do business, and we believe that customers and developers choose us because our products and services are the best in the world.”
For Epic, the video game maker won a partial victory from Gonzalez Rogers, but its broader argument didn’t do so well. Tim Sweeney, CEO and founder of the company, expressed great disappointment with the decision, calling it a loss.
In Sweeney’s opinion, the judge’s decision did not go far enough. App developers still can’t put their own payment system inside apps (the change that originally got Fortnite banned from the App Store), so getting customers to circumvent Apple’s fee requires them to leave one. application and access an external website.
The ruling also doesn’t allow alternative app stores on iPhones, keeping something like the Epic Games Store unavailable to iPhone users.
In addition, the court ruled that Epic Games violated its contract with Apple when it placed an alternative payment system within Fortnite in August 2020. On Monday, Sweeney tweeted that Epic paid Apple $6 million in response.
Will Fortnite return to the iPhone?
Not so soon, it seems.
Epic is in no hurry to comply with App Store rules and get the popular game back on iPhones.
“Fortnite will return to the iOS App Store whenever and wherever Epic can offer in-app payment in fair competition to Apple’s in-app payment, passing the savings on to consumers,” Sweeney said on Twitter.
When will this finally be resolved?
It might take a while. When the case moves to the Ninth Circuit, it can be heard by a panel of three judges. This process can take anywhere from several months to over a year, which means that this case still has a lot of room to run.
Depending on the decision there, another appeal may take the case to the United States Supreme Court.
In the meantime, Congress could pass its own laws that affect how Apple operates. A bipartisan bill that would change the way payments are made on the iPhone and smart Android phones has already been introduced.
From the news www.govtech.com
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