Apple Can Continue Charging 30% Commission Fee, Despite Court Ruling

Apple Inc. (AAPL) could still ask mobile app developers to pay 30 percent commission, despite a court ruling, reports said on Wednesday. Last week, a U.S District Court had ruled that the iPhone manufacturer must allow users to make payments through the Internet. The judge also was critical of the high commission charged by the company.

In the follow-up to a May trial in a lawsuit filed by Epic Games Inc., U.S District Judge Yvonne Gonzalez Rogers said that Apple could not stop developers from using "buttons, external links or other calls to action that direct customers to purchasing methods" other than Apple's payment system. The judge, in her 185-page judgement, however did not direct Apple to bring down its commission.

According to industry analysts, Apple will make use of this loophole in the judgement to keep on charging the 30 percent commission, thus maintaining its steady stream of revenue.

In her judgement, the judge had observed that Apple hasn't shown that its 30 percent rate levied on larger-scale developers is "justified." The judge ruled that the petitioner, Epic Games' revenue collection other than Apple's in-app-purchase system for the popular game Fortnite violated the original contract and so payment must be done at the 30 percent rate.

The court order did not specifically rule that the developers who keep consumers away from Apple's payment system will get to keep all the revenue from in-app subscriptions and other digital items. Instead, the judge observed, "Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission."

Commenting on the developments, Epic Games Chief Executive Officer Tim Sweeney said in a statement that his company has paid Apple $6 million for commissions it got in the Fortnite game last year.

The iPhone maker will not be making any immediate changes in the manner in which collects the revenue in the near future as the judge's permanent injunction will take effect in early December and the company could simply ask for a stay to delay the ruling.

The company could also file against the injunction in spite of winning most of the case. Epic Games has already stated that it would fight legally in the areas it has lost. Apple CEO Tim Cook said in the court hearing that the high commission fee covers developer tools, distribution and customer service in addition to payment processing. The company keeping on such a high fee for developers who do not use these services is not the correct way forward.

Before the District Court ruling, Apple had agreed to let "reader" apps like video, music, news, books and other media, to direct users away from its store to complete transactions on the web. Having made this concession, the company might find it tough going ahead to collect commissions from other developers.

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