Apple cannot ban developers from using third-party payment options, judge orders

By Shubhangi Mathur, 7:09 PM ET

In the judicial trail between Apple and Epic Games, Apple suffered a major blow as a U.S. federal judge ruled that the iPhone maker can no longer prohibit developers from directing users to third-party payment options.

U.S. District Judge Yvonne Gonzalez Rogers ruled that developers can now provide links in their apps to let customers pay outside of Apple’s own in-app purchase system.

Apple can also not ban developers from communicating with customers via contact information obtained by them when customers signed up within the app, the ruling said.

Shares of Apple fell 2.5% on Friday afternoon, erasing $63 billion from its valuation.

Epic Games’ most requested demand of letting app makers use their own in-app payment systems in App Store was not accepted, though. Apple charges 15% to 30% commission to developers for its own in-app payment system.

Epic CEO Tim Sweeney tweeted that the ruling isn't a win for developers or for consumers.

Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers, Epic's CEO, Sweeney, said on Twitter. We will fight on.

Epic Games said it would appeal the ruling.

Apple officials said the company has not finalized on the implementation of the ruling and whether it will appeal.

The judge rejected Epic’s blame of Apple being monopolist and said that “success is not illegal.”

(With inputs from Reuters)