US Court: "Apple's Ban on In-App Payment Prohibition is Anti-Competitive Behavior"

Court Rules to Allow External Links for Payments Instead of In-App Purchases
Not a Monopoly in Mobile Gaming
Apple's Partial Victory but Potential Changes to App Store Ecosystem

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] A red light has been lit on Apple's business structure. Following the South Korean National Assembly's legislation banning in-app payments, a U.S. court has ruled that Apple's ban on in-app payments is an anticompetitive practice.

This is a critical judgment for Apple, which has been collecting a 30% commission on App Store sales, but the stock prices of game developers listed on the App Store all rose simultaneously.

However, Apple avoided the crisis of being judged as a monopoly in the mobile gaming sector.

The U.S. District Court in Oakland, California, ruled on the 10th (local time) that Apple's prohibition on providing in-app payment methods other than the Apple App Store to app users is anticompetitive.

Judge Yvonne Gonzalez Rogers stated, "The court concluded that Apple's anti-steering provisions hide important information from consumers and unlawfully suppress consumer choice," adding "The anti-steering provisions are anticompetitive, and a nationwide injunction to remove these provisions is justified."

The court ordered Apple to allow external payment links within 90 days.

However, the court ruled that Apple is not a monopoly in the mobile gaming market. Judge Rogers said, "In light of federal or state antitrust laws, it cannot be ultimately concluded that Apple is a monopolistic company."

Apple suffered a blow to its in-app payment ban policy but avoided being labeled a monopoly.

Apple won on 9 out of 10 lawsuit issues raised, including antitrust violations, and was only found guilty of engaging in anticompetitive conduct under California state law.

The New York Times (NYT) pointed out that this ruling allows companies to avoid Apple's App Store payment fees, which can be as high as 30%.

The court ruled that Apple must pay damages for Epic Games' in-app payments, which triggered the lawsuit.

The court stated that Epic Games' establishment of an in-game payment system where users pay directly to Epic rather than through the Apple App Store violated the contract with Apple, and Epic must pay Apple 30% of the damages.

Apple removed the game 'Fortnite' from the App Store when Epic Games pushed for in-app payments.

The New York Times evaluated that Apple and Epic Games each achieved a "half victory."

For Apple, avoiding the label of an "antitrust violator" is a significant achievement, but the NYT pointed out that the court's decision could reshape the online market worth $100 billion (about 117 trillion won), which might be Apple's biggest loss.

However, both Apple and Epic Games are expected to appeal the ruling, so it may take several years until a final conclusion is reached.

Apple said, "The court reaffirmed what we have always known: the App Store does not violate antitrust laws," expressing relief at avoiding the stigma of being a monopoly.

Sweeney, CEO of Epic Games, expressed dissatisfaction with the court allowing companies to complete in-app transactions through their own payment systems but requiring users to follow links to external websites for payment, and announced intentions to appeal.