Finally, the court has ruled that these harsh restrictions and high fees are stifling competition. Apple Inc. has been ordered to lift certain restrictions and open the walled gates to crypto-powered services and external payments – something that could change the entire ecosystem.
Battle With Epic Games Set the Stage
Apple’s extreme restrictions on crypto and external payments were brought to the court’s attention by software company Epic Games Inc., responsible for several popular games, most notably Fortnite.
The company has had long-standing quibbles with tech giant Apple, and the legal war started in 2020. In 2021, a federal court in California ruled that Apple was blocking fair competition and ordered the company to loosen restrictions and limitations.
But it didn’t end there. Even after the court order, restrictions remained tight, and all crypto payments still had to go through the Apple system, forcing developers to pay a 30% fee. The court therefore ruled that Apple was deliberately blocking competition, and called out Apple’s VP of Finance, Alex Roman, for lying under oath. Internal documents reveal that Apple was aware of the effects of the restrictions and intentionally chose to be anticompetitive despite the court ruling in 2021.
Judge Yvonne Gonzalez Rogers declared that Apple’s “ongoing efforts to obstruct competition are unacceptable.” The court has prohibited Apple from imposing new fees or restrictions on developers who provide alternative payment options outside of its platform.
Creating a Level Playing Field
What does the CEO of Epic Games, Tim Sweeney, think of the ruling in Epic’s favor?
He calls it “a huge victory for developers,” and says that it will force Apple to compete in the market on a level playing field rather than blocking them.
“This is what we wanted all along. We’ve always acknowledged Apple’s right to operate their own store; their right to operate their own payment service,” Tim says in a press conference.
“We’ve just always wanted a level playing field in which developers can compete with Apple to offer their own products, and then consumers are free to choose the best, and let the best product win.”
As different developers and companies will be able to offer their services to Apple users, there could be a leap in innovation necessary for technology to thrive. This new playing field will affect all kinds of businesses, from casinos supporting multiple cryptocurrencies to iOS tools offering subscriptions through external payment gateways.
Specific Mandates From the Court
Specific mandates that the court has given to Apple Inc. include the following:
- Apple must permit developers to add external payment systems within their apps, free from prior approval processes.
- Apple is prohibited from levying commissions or fees on transactions processed outside its in-app purchase system.
- Apple cannot track or monitor purchases made through external links, ensuring developer privacy.
- Apple cannot enforce design restrictions on how external payment links are presented in apps.
- Apple must allow apps to allow users to unlock features with NFTs.
While this is a major shift for Apple and will affect much more than just Epic Games, there are still some restrictions left for businesses in cryptocurrency. For instance, people who don’t already own crypto will need to go through the same “Know Your Customer” process to purchase digital currencies.
Still, the lifted restrictions will mean jumping through a lot fewer hoops than before.
Thoughts on the Future of Apple and Web3
This drastic shift in policies accomplishes much more than simply ending Apple’s monopoly in app payments – it’s truly opened up the gates to cryptocurrency and given Web3 developers the freedom to innovate.
With this newfound freedom, the iOS landscape is sure to grow and thrive in a way it hasn’t been able to in years. Developers cannot just innovate without restrictions, but also skip the Apple tax and pass along savings to customers. This gives them the freedom to focus on providing real value to users and delivering a better user experience.
While companies wanting to offer services on the platform will still have to play by some of Apple’s rules, there will finally be enough space to grow the Web3 market and beyond on Apple devices and reach a new audience previously hogged by Apple.
