Apple, Inc. AAPL shares, which touched a 52-week high earlier this week, are in reversal mode Friday.
What Happened: Apple was hit by the ruling issued by a U.S. judge on the antitrust lawsuit brought about by Epic Games over the company's restrictive practices in its App Store and the 30% commission its charges for each purchase made on its App Store.
The judge said Apple's conduct is anti-competitive and its anti-steering provisions are illegal.
Issuing a permanent injunction, Judge Yvonne Gonzalez-Rogers of the Northern District Court of California, ruled Apple is permanently restrained and enjoined from:
- Prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanism
- Communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
As a consolation to Apple, the judge didn't find the company as an antitrust monopolist in the submarket for mobile gaming transactions.
"Epic Games failed in its burden to demonstrate Apple is an illegal monopolist," the ruling read. The injunction will take effect in 90 days, the signed order showed.
Related Link: Why Apple Is A 'Top Tech Name' To Own Right Now
Why It's Important: Epic has taken exception to Apple preventing other payment options on its iPhone, iPad and iPod. The manufacturer of the hugely popular "Fortnite" game tried circumventing Apple's steep commission by using an in-app payment system in Fortnite in August 2020. Apple retaliated by removing Epic Games from its App Store.
Following the development, Apple announced some concessions in late August to help small developers succeed in the marketplace.
"This is a moderation, not an elimination, of the anti-steering clause," Loup Funds' Gene Munster said, commenting on the concessions.
Apple's adjustment, according to the analyst, is a win-win-win for all three parties: Apple, app makers and lawmakers.
Even if Apple buckles under pressure and reduces its take rate from 30% to 10% — a possibility which is unlikely — it could still make more money ultimately, Munster had previously said. A reduction in fees will likely spur greater growth in the app development ecosystem.
The development triggered strong upward moves in several app developers such as Roblox Corporation RBLX, Match Group, Inc. MTCH, Electronic Arts Inc. EA, Spotify Technology S.A. SPOT, Zoom Video Communications, Inc. ZM and Zynga Inc. ZNGA.
Apple shares were down 2.87% at $149.65 at publication time.
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