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Apple's anti-steering provision deemed unlawful by a California court

Monday 1 May 2023 11:04 CET | News

A court in California has deemed Apple’s anti-steering provision unlawful as it prevented developers from using alternative in-app payment methods.

 

Specifically, the United States Court of Appeals for the Ninth Circuit issued the ruling in the case of Apple vs Epic Games, which is the creator of the Fortnite battle royale video game. The court upheld the decision of a lower court from 2021 and concluded that Apple’s anti-steering provision harmed Epic. According to the court, the policy in question increased the costs of Epic’s subsidiaries’ apps that are still on Apple’s App Store and prevented other app users from becoming Epic Games consumers. 

Apple’s anti-steering provision policy dictates that iOS developers cannot communicate out-of-app payment methods through certain mechanisms such as in-app links. Apple argued that its anti-steering provisions shouldn’t apply to Epic Games because it terminated Epic Games’ iOS developer account in August 2020. 

However, the court disagreed and ruled that Epic Games would have earned additional revenue since then if it weren’t for Apple’s policy. The court applied the competitor-suit ‘tethering test’ and the consumer-suit ‘balancing test’ and found the anti-steering provision to be unfair. Furthermore, the court also took into account Apple’s 30% commission and concluded that consumers would have chosen to interact with Epic Games directly had they learned about its much lower commission rate of 12%. 

Founder and chief executive of Epic Games, Tim Sweeney, took to Twitter to express his views about the court’s ruling. He emphasised that the court's rejection of Apple's anti-steering provisions has the potential to free iOS developers to send consumers to the web to do business with them directly there.

 

A court in California has deemed Apple’s anti-steering provision unlawful as it prevented developers from using alternative in-app payment methods.

 

How does this affect the crypto and NFT space?

If Apple doesn’t appeal the ruling, it might set a case law precedent that helps the creators of crypto and nonfungible token apps because they won’t be subject to Apple’s 30% commission. In essence, the court’s decision could clear the path for cryptocurrency and nonfungible token (NFT) projects to add more functionality to their iOS apps. 

Another way for consumers to avoid Apple’s 30% tax was made possible by the European Union, which recently introduced a series of anti-monopolistic rules that require Apple to permit third-party app stores on its devices. One crypto project that made its way into the App Store in April 2023 is the decentralised exchange Uniswap.


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Keywords: regulation, NFT, Apple, payment methods, cryptocurrency
Categories: DeFi & Crypto & Web3
Companies: Apple
Countries: United States
This article is part of category

DeFi & Crypto & Web3

Apple

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