Apple’s ban on external payments was upheld as illegal in likely gains for NFTs and crypto

A California court ruled that Apple violated state competition laws by preventing app developers from using alternative in-app payment methods other than their own that included a 30% commission.

The ruling could clear the way for cryptocurrency and nonfungible token (NFT) projects to add more functionality to their iOS apps.

The decision on April 24 was made by the United States Court of Appeals for the Ninth Circuit in the case Apple vs Epic Games – the creator of the video game Fortnite.

The court upheld a lower court’s 2021 decision, explaining that Apple’s anti-steering provision harmed Epic.

The anti-governance provision is an Apple policy that states that iOS developers cannot communicate payment methods outside of the app through certain mechanisms, such as in-app links.

The policy increased the cost of Epic’s subsidiaries’ apps that remain on Apple’s App Store and prevented other app users from becoming potential Epic Games consumers, the court explained.

Tim Sweeney, founder and CEO of Epic Games, tweeted on April 24 that the ruling “frees up iOS developers” by allowing them to direct consumers to alternative payment solutions.

While the court ruled in favor of Apple on most issues, the tech giant failed in its argument that the antitrust provisions should not apply to Epic Games because it terminated Epic Games’ iOS developer account in August 2020.

The court determined that Epic Games would have earned additional revenue since then — but for Apple’s policy — using the competitor suit’s “tethering test” and the consumer suit’s “balancing test” and found the antitrust provision to be “unfair” under both tests.

The court explained Apple’s antitrust violation through a different angle by ruling that consumers would have flocked to Epic Games directly if they had learned of its much lower commission rate of 12%, compared to Apple’s 30%.

“If consumers can learn about lower app prices, which are made possible by developers’ lower costs, and have the opportunity to replace the platform with the lower prices, they will do so – increasing the revenue that the Epic Games Store generates.”

If Apple does not appeal the ruling, it could create case law in favor of creators of crypto and non-fungible token apps because they will not be subject to Apple’s 30% “tax.”

Related: Robinhood Wallet is rolling out on iOS with Android support to follow

Decentralized exchange Uniswap is one of the latest crypto projects to hit the App Store despite Apple initially holding back its launch in March.

Nearly two months ago, the European Union set new antitrust rules that require Apple to allow third-party app stores on its devices, which in turn allow consumers to bypass Apple’s 30% commissions.

However, in December, Apple interfered with NFT transactions sent on Coinbase’s self-storage wallet, claiming it has the right to “collect 30% of the gas fee” through in-app purchases.

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