Apple’s $85 BILLION revenue from in-app purchases could take a hit as Supreme Court breaks up tech giant’s ‘monopoly’

• Supreme Court ordered Apple to insert links in apps to other payment options 
• The move will cost Apple billions in revenue – it made $85B last fiscal year 
• READ MORE: The move is part of an antitrust suit filed by Epic Games in 2020

Apple could lose billions of dollars after being ordered by the US Supreme Court  to insert links in apps to other payment options.

The move follows a four-year legal battle with Epic Games, which sued the tech giant, claiming it was operating a monopoly in its App Store for digital services.

When you download an app that  has in-app purchases, the default payment method is through Apple Pay.

But under the new ruling, Apple would be forced to add another linked at checkout that lets users pay developers directly, which avoids the tech giant’s 30 percent fee taken for such purchases. 

The justices rejected Apple’s appeal of lower-court rulings that found some of App Store rules for apps purchased on more than one  billion iPhones constitute unfair competition under California law. WHAT??

Apple charges up to a 30 percent commission for in-app purchases, which accounted $85 billion in revenue during the company’s last fiscal year ending in September.

But now, developers can guide users to purchase items to avoid the fee. 

The order appears to be a temporary move, but will likely eat into the tech giant revenue that is predicted to reach $182 billion this year and $207 billion in 2025, according to research firm Sensor Tower. 

Epic, based in Cary, North Carolina, had claimed that Apple’s app store had turned into an illegal monopoly that stifles innovation and competition while generating billions of dollars in profit for Apple. 

Although a federal judge rejected the assertion that Apple had a monopoly on mobile apps, the judge concluded consumers should have more discretion in how to pay inside apps.  IS THIS LONG WINDED?

The ruling follows a four-year feud between the two companies. 

Back in August 2020, Epic tried to offer an alternative way to get its mobile app, attempting to evade Apple’s commissions charged when digital goods were purchased by players on Fortnite and other games.

Epic was offering players coins to play Fornite through its website, avoid Apple’s fee for in-app purchases.

Apple ousted Epic from its app store after it tried to get around its restrictions.

In a statement, Apple said Fortnite was removed because Epic had launched the payment feature with the ‘express intent of violating the App Store guidelines’ after having had apps in the store for a decade. 

However, the game maker retaliated with the suit, but was not seeking money.

Instead, Epic aimed to end many of the companies’ practices related to their app stores.

‘Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear,’ Epic said in its 2020 lawsuit, filed in the Northern District of California.

Although a federal judge rejected the assertion that Apple had a monopoly on mobile apps, the judge concluded consumers should have more discretion in how to pay inside apps. 

And while that change has been made, the company’s CEO does not see it as a win. 

‘The Supreme Court denied both sides’ appeals of the Epic v. Apple antitrust case,’ he shared on X.

‘The court battle to open iOS to competing stores and payments is lost in the United States. A sad outcome for all developers.’