Apple vs Epic

Apple’s 30% tax cut on in-app purchases deemed illegal by court

Do you remember the lawsuit between Epic Games and Apple? The lawsuit started in 2020 when Epic Games filed a lawsuit in the US District Court of Northern California. This happened after Apple removed their game from Appstore because the company bypassed Apple’s payment mechanism to save the 30% tax cut and gave discounts to their users. Now the verdict for the lawsuit has finally been out, and Apple’s 30% tax cut on in-app purchases has been deemed illegal by the court.

Apple vs. Epic Games verdict

A judge of the US Court of federal appeals has said that Apple has violated the Unfair Competition Law. The company did so by not allowing developers to use alternate mediums to accept payment from their customers. By doing so, they were charging a hefty 30% commission from the developers, and no one had any option.

Apple's 30% tax cut on in-app purchases deemed illegal by court

The verdict that the judges gave was mixed with Apple finding itself in some trouble. When the lawsuit was filed, Epic Games alleged that Apple had a monopoly in the mobile gaming market. However, that was deemed not to be the case by the judges in the court. Though they did say that Apple not allowing developers to use alternate payment mediums does stifle fair play and competition. This was said by a judge that was on the case in 2021, and a recent panel on the case upheld that decision.

Tim Sweeney, the founder, and CEO of Epic Games, tweeted about the same. He said that even though Apple prevailed in court, it didn’t win the lawsuit completely as now iOS developers are free to accept payments via whatever medium they want. This way, they can circumvent the 30% tax of Apple and also reduce the cost for the end-consumers. Tim is also working on the next steps from here.

What does it mean for the crypto industry?

It’s being said that the WEB3 industry and app developers in the space will benefit immensely from the court’s verdict. In September 2022, Apple opened up its store to NFTs, but only the ones that are being sold directly via their channel, which gives them a 30% cut. The tech giant also said that only NFTs purchased via them would be able to be used for unlocking any special features within an application.

It was not something that the community appreciated. However, with this new ruling by the court, they will not be able to continue this opening up the space. Web 3 developers will now have access to billions of iOS devices which will be beneficial for the industry.

If this didn’t happen, the WEB3 space would never have taken off in iOS because no other platform charges such hefty fees. For example, Open Sea, which is the largest NFT marked, used to charge a 2.5% fee which seems reasonable. However, they even removed that to be more competitive in the market.

What’s next?

Apple has said that they are reviewing the decision. So, if they do not appeal this decision or if they do and it is not changed, then it will be huge for all app developers and the web3 industry. Users can be easily directed to other sites to purchase NFTs without having to pay huge fees, and they can use them to unlock features in iOS apps without any trouble. It could also open up developers to use crypto transactions for in-app purchases.

What are your thoughts as Apple’s 30% tax cut on in-app purchases has been deemed illegal by the court? And do you think this will benefit the crypto industry? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.

Also Read: Peter Schiff predicts that the US will default on its debt—massive economic crisis ahead.