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A federal judge on Friday ordered Apple to stop restricting app developers from diverting customers to other ways to pay for their services; It’s a move that will allow companies to avoid Apple’s commission of up to 30 percent on some app sales.
The order could upset the economy of a $100 billion online marketplace and is a major setback for Apple, which is fueling its expanding profits based on revenue from the App Store.
The order came as part of the decision in an important piece of legislation. The lawsuit between Apple and Epic Games, the maker of the popular Fortnite game, which sued Apple last year for its App Store policies.
In the ruling, U.S. District Court for the Northern District of California, Judge Yvonne Gonzalez Rogers, said that Apple violated California’s laws against unfair competition. But Epic ruled in Apple’s favor last year when it allowed Fortnite users to pay directly on the iPhone app instead of Apple, including in violation of its contract with Apple.
The decision could have a huge ripple effect in the digital economy. If Epic wins after the anticipated appeals, it will be a new way for companies to avoid App Store commissions of up to 30 percent. The change would be a boon to the profitability of businesses that say they have to share most of their sales with Apple.
Epic has sued Google. It’s for the same issues with app store commissions on the Android OS, and this case is expected to go to trial this year. Last month, 36 states and the District of Columbia also sued Google. to force companies to use the payment system in exchange for access to the app store. Google’s public response said that, in fact, Apple is doing the same.
The judge’s order takes effect within 90 days. Apple may try to block the order before then.
Apple and Epic did not immediately respond to requests for comment.
This is a developing story. Check back for updates.
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