■ Despite last week’s court ruling against it, Apple could still tell mobile app developers it intends to collect commissions up to 30 per cent.
Tech giant ordered to allow third-party payment systems, but developers’ fee left intact
Apple Inc. could tell mobile app developers that it still intends to collect a commission of up to 30 per cent despite last week’s court ruling ordering the iPhone maker to let users make payments on the web and questioning whether its much-criticized fee is justified.
The judge’s 185-page decision following a May trial in a lawsuit by Epic Games Inc. left enough wiggle room for Apple to try to keep its App Store revenue stream largely intact, lawyers and analysts say, but doing so risks logistical hurdles and political blowback.
While U.S. District Judge Yvonne Gonzalez Rogers said Apple can no longer ban developers from using “buttons, external links or other calls to action that direct customers to purchasing methods” other than Apple’s payment system, she stopped short of ordering the company to lower its commission.
The order didn’t say developers who steer consumers away from Apple’s system are entitled to keep all the revenue for themselves from in-app subscriptions and other digital items. Instead, the judge wrote, “Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.”
“Apple has the legal right to do business with anyone they want,” said Paul Gallant, managing director at Cowen & Co. “So Apple could change the terms of the App Store and say to developers, regardless of where you collect your revenue, you owe us 30 per cent, and if developers refuse to pay it, Apple would be free to de-platform them.”
Gonzalez Rogers wrote that Apple hasn’t shown that its 30 per cent rate levied on larger-scale developers is “justified.” She didn’t ask Apple to change it, however, and found that Epic’s collection of revenue outside of Apple’s inapp-purchase system for the popular game “Fortnite” violated their contract and must be paid back at the 30 per cent rate.
On Monday, Epic Games chief executive officer Tim Sweeney said his company has paid Apple $6 million (U.S.) for commissions it circumvented in “Fortnite” last year.
But beyond the court fight, it’s unclear how Apple would collect revenue from its large group of developers if they were to use their own web-based payment systems.
Apple chief executive officer Tim Cook alluded to that challenge when he testified at the trial. “We would have to come up with another system to invoice developers, which I think would be a mess,” he said. Asked by the judge directly if developers would still need to pay Apple if they collected payments from consumers outside of the iPhone maker’s in-app-purchase system, Cook said: “Yes, of course.”