A Judge Blocked Apple From Collecting These Commissions
Apple recently lost a major antitrust case to Epic Games that has forced the tech giant to substantially change its iOS, Apple’s operating system used by millions of Americans.
In April, Judge Yvonne Gonzalez Rogers of the U.S. District Court of the Northern District of California ruled that Apple may not charge developers any commission for sales made outside of the App Store. While this move will make developers more profitable and save consumers money in the short term, it could have lasting and devastating effects on Apple users; forcing Apple to give developers free access to its network discourages the company from investing in its App Store.
Epic Games, the producer of the popular Fortnite video game, first sued Apple in August 2020, alleging that Apple had violated the federal Sherman Antitrust Act as well as California’s Cartwright Act and Unfair Competition Law by monopolizing the iOS app distribution and in-app payment processing markets via anticompetitive conduct. This conduct includes, namely, Apple’s exclusion of third-party app stores and apps from its iOS devices and requiring developers to distribute apps exclusively via the App Store and use Apple’s in-app payment processing (from which Apple collects a 30 percent commission on every sale). Epic’s suit was prompted when Apple removed Fortnite from the App Store after discovering that Epic added an external payment service.
In September 2021, the court dismissed the nine counts Epic made under the Sherman Antitrust Act and the Cartwright Act but held that Apple’s antisteering provisions—contractual stipulations designed to prevent developers from directing iOS users to external payment options—violated the Unfair Competition Law. Brian Albrecht, chief economist at the International Center for Law and Economics, tells Reason that Apple’s in-app fees can be justified by platform investment incentives and security concerns, which shield Apple from liability under federal antitrust
Article from Reason.com
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.
