Key Takeaways
- Apple has made court-ordered changes to its app store allowing developers to direct users to external sites to avoid paying Apple’s fee for in-app purchases.
- Users and developers shouldn’t expect any discounts, however, since Apple still demands a cut on purchases made via external links.
- Epic Games, which sued Apple in 2020 to force the changes, vowed to challenge Apple’s new policy in court.
A years-long legal battle between Apple (AAPL) and a video game company is set to reignite after the iPhone maker made court-ordered changes to its app store that preserve its cut of the multibillion dollar market for in-app purchases.
On Tuesday, Apple made changes to its policies for software developers who offer their programs on Apple’s popular online store. According to documentation on Apple’s website, developers are now allowed to provide users with links to external websites for purchases they make within the apps offered on the app store—but Apple will still take a 27% cut of the sale.
The change was mandated by a court order stemming from an antitrust lawsuit by video game maker Epic, which had challenged a fee of up to 30% that Apple charges on in-app purchases.
Epic CEO Tim Sweeney vowed to challenge the new policy in federal court, arguing that it is a “bad faith” effort to comply with the 2021 federal court mandate that went into effect Tuesday after the Supreme Court declined to hear appeals.
“Developers can’t offer digital items more cheaply on the web after paying a third-party payment processor 3%-6% and paying this new 27% Apple Tax,” he posted on social media platform X, formerly known as Twitter.
The move allows Apple to hold on to its share of the lucrative in-app purchase market. Customers spent $85 billion on in-app purchases through Apple’s app store in 2021, and that figure could nearly double to $161 billion by 2026, a 2022 report by Sensor Tower predicted.
Apple also filed a demand in court for Epic to pay $73.4 million in legal fees. In their legal filing, Apple’s attorneys noted the total is a “10% discount” from the $81.6 million in legal fees that the company had racked up during the legal battle, which began in 2020. Epic had prevailed on one of the 10 claims it had initially made in its antitrust suit.