Apple Retains App Store Taxation Policy as Epic Games' Petition Denied

In a recent legal ruling, Apple Inc (NASDAQ: AAPL) has secured the right to maintain its App Store payment rules, including the 30% tax levied on application developers using the platform.

As noted by Elon Musk:

This decision comes after Epic Games' petition to enable developers to direct users to alternative purchasing options was declined by US Supreme Court Justice Elena Kagan.

Apple's App Store has been the subject of controversy due to its policy, which enforces a 30% fee for apps and in-app purchases on various Apple operating systems.

The company applies this fee to app developers generating over $1 million in annual revenue through the ‌App Store‌.

Although there has been growing demand for exceptions, especially regarding non-fungible tokens (NFTs), Apple has maintained strict guidelines.

These guidelines include prohibiting apps from offering exclusive access to NFT owners and linking users to third-party sites that might bypass the Apple ecosystem and its associated tax.

Despite criticisms from companies, this taxation has significantly contributed to Apple's services revenue, reaching $78.1 billion in the fiscal year 2022.

One of the most notable challengers has been Epic Games, the creator of Fortnite, which has accused Apple of antitrust violations by imposing the 30% fee on app makers.

The legal battle between Epic Games and Apple has spanned three years, with varying degrees of success for both parties.

In a previous antitrust probe by the US Justice Department, Apple was cleared of antitrust law violations and was not deemed a monopolist.

In response, Epic Games appealed the ruling, alleging legal errors in the original court decision.

While a US court previously ruled that Apple could not prevent app developers from directing users to third-party payment options, it also concluded that Epic Games failed to prove that Apple was operating an illegal monopoly.

However, a significant moment occurred in April when the United States Court of Appeals for the Ninth Circuit in California defended Epic Games, asserting that Apple's policy violated state competition laws.

This decision brought hope to cryptocurrency and NFT projects seeking more functionality for their iOS apps.

Despite these previous developments, the latest ruling by Justice Elena Kagan means that Apple is legally entitled to maintain its taxation policy, as Epic Games' recent petition against Apple has been declined.