Supreme Court Refuses to Review Apple vs. Epic Dispute—What This Means for the Future
The Supreme Court's refusal to hear the Apple and Epic Games case signals potential shifts in Apple's App Store policies, impacting the vast in-app purchase ecosystem.
Supreme Court Decision May Reshape the Billions-Dollar In-App Purchase Landscape
Essential Insights
- The Supreme Court has concluded a prolonged legal conflict between Apple and Epic Games by declining to revisit a prior lower court ruling.
- This decision could compel Apple to modify its App Store regulations, where it currently collects up to a 30% commission on in-app transactions.
- The lower court's mandate requires Apple to permit developers to direct users to external websites for purchases, circumventing Apple's fees.
- In 2021 alone, consumers spent an estimated $85 billion on in-app purchases via Apple's App Store.
The landscape of Apple’s (AAPL) online marketplace is poised for transformation following the Supreme Court's choice not to hear the dispute with Epic Games, the creators of Fortnite.
On Tuesday, the court declined to overturn a 2021 federal court decision that compelled Apple to allow app developers to provide links to payment options outside the App Store, effectively bypassing Apple's commission fees.
This outcome directly impacts a lucrative revenue stream for Apple. Reports from 2022 by Sensor Tower indicate that in-app purchases via Apple's platform reached $85 billion in 2021 and are projected to surge to $161 billion by 2026.
Neither Apple nor Epic Games provided immediate comments following the ruling.
The legal battle originated in 2020 when Epic filed an antitrust lawsuit accusing Apple of monopolistic control over software distribution on its devices, particularly criticizing the 30% fee on in-app purchases.
For instance, in 2020, Fortnite players on Apple devices could buy virtual items like character hats, with Apple receiving a portion of these sales. (Note that Fortnite was removed from the App Store that year.)
The federal court largely ruled in Apple's favor but granted Epic a partial win by ordering changes to App Store policies. Developers are now permitted to link users to external websites to complete purchases directly, avoiding Apple's fees.
Both parties appealed to the Supreme Court, but with the court declining to hear the case, no further appeals are possible. Last year, a federal appeals court allowed Apple to delay implementing changes until the case's resolution but stated that the mandate would take effect immediately if the Supreme Court refused to review the case.
Epic CEO Tim Sweeney commented on social media platform X, "As of today, developers can begin exercising their court-established right to tell US customers about better prices on the web."
Update, Jan. 16, 2023: Included statement from Epic CEO Tim Sweeney.
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