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Apple 30% NFT tax is illegal
The federal appeals court has issued a ruling declaring Apple’s 30% tax on in-app purchases of NFTs illegal. This decision could significantly disrupt the way NFTs are sold and bought on the popular app store. In addition, the ruling could have a major impact on the NFT community. Let’s dive in!
Epic Games makes history with landmark ruling against Apple’s 30% NFT tax
Epic Games has made history with its successful case against Apple’s 30% tax on NFT transactions. The US Court of Appeals for the Ninth Circuit ruled that Apple’s App Store policies were anticompetitive and in violation of California’s Unfair Competition Law. The decision declared that Apple’s mandate for developers to use its in-app payment system for NFT transactions stifled innovation and hindered competition in the market. This landmark ruling will certainly shake up the NFT industry and may have far-reaching consequences for the app store’s guidelines.
Notably, the ruling was part of a reevaluation of a lawsuit filed by Epic Games, the company that made Fortnite, against Apple in 2020. On Monday, a panel of judges reexamined the lawsuit Epic Games filed, claiming that the tech giant had a monopoly on the mobile gaming market. Significantly, Apple won most of the claim. But the panel upheld the first judge’s finding that Apple impeded competition. This decision has significant implications for the way Apple does business going forward.
Epic Games and the broader crypto industry achieved a significant triumph with this ruling. Marked, it can potentially lead to lower NFT prices and increased market competition. Also, developers may find it easier to create and sell NFTs on iOS devices. “This is a huge win for both consumers and developers,” said Tim Sweeney, CEO of Epic Games. He also added that “Apple’s anti-competitive practices have stifled innovation and competition in the NFT market for too long. This ruling is a step in the right direction.”
If the court ruling stands, Web3 app developers could benefit in many ways. Although Apple allowed NFTs on the App Store last year, NFTs could only be sold through Apple’s own payment system. Additionally, this took a significant 30% cut of most transactions. The Web3 community reacted negatively to the system. This is because the App Store presents a huge opportunity for Web3 companies seeking mainstream adoption.
Furthermore, most developers were unable to take advantage of this opportunity due to Apple’s payment policies. Prominent NFT marketplace OpenSea had previously charged a 2.5% commission on NFT sales. But it recently eliminated that fee to better compete with rivals.
In October, Apple specified in its guidelines that NFTs used to unlock additional content or features in an app could only be purchased through the in-app payment system. This policy change created a more difficult environment for NFT-powered apps sold in the App Store. Furthermore, the move placed additional restrictions on token gating, items and other benefits. Apple also required developers to accept their share of 30% of sales.
However, the community expects Apple to appeal. Ultimately, this ruling deals a significant blow to the company, which has faced widespread criticism for its App Store policies. The outcome of the ruling is still uncertain, but it could have a profound impact on the NFT market and the entire crypto industry.
