Shares of tech giant Apple (AAPL) were down 3.3% on Friday to close at $148.97 after a U.S. judge ruled in the Epic vs. Apple trial that the App Store can no longer prohibit developers from allowing third-party payment options, according to a Reuters report.
This means that app developers can now add buttons or links that lead users directly to other payment methods, in addition to the existing App Store in-app purchase service.
However, Judge Gonzalez Rogers sided with Apple on many points. She did not grant Epic’s prime request to force Apple to allow app makers to use their own in-app purchase systems.
Therefore, Apple will continue to charge commission fees ranging from 15% – 30% for its in-app payment system. (See Apple stock charts on TipRanks)
Notably, the company’s App Store generates major revenues for Apple, and game developers are the biggest contributors of revenue for the App Store.
Other requests by Epic not granted by the judge include forcing Apple to open the iPhone to third-party app stores. Further, the judge also rejected Epic’s argument that Apple is a monopolist.
Important to note, the Epic lawsuit was initiated after the “Fortnite” game maker Epic Games inserted its own in-app payments system into the Fortnite game.
Expressing his disappointment, Epic CEO Tim Sweeney mentioned in a tweet that the ruling “isn’t a win for developers or for consumers.”
Epic and other Apple rivals plan to make further appeals to legislators to get their demands passed into law.
Apple said, “As the Court recognized ‘success is not illegal. Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”
The company said that it is contemplating ways to implement the new ruling and considering whether it will appeal against the same or not.
South Korea’s parliament has already passed a law that forces Apple to allow third-party in-app payment systems. Other lawmakers in the U.S. and Europe are evaluating similar laws.
The impact on the company’s revenue from the ruling remains to be seen. It depends on future rulings and government laws, as well as on Apple’s approach to the implementation of such rulings.
J.P. Morgan analyst Samik Chatterjee recently maintained a Buy rating on Apple with a price target of $180 (20.8% upside potential).
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 16 Buys and 6 Holds. The average Apple price target of $166.71 implies that the stock has 11.9% upside potential from current levels.
Apple scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 29% over the past year.
Related News:
Genius Sports Beats Q2 Revenue Expectations; Shares Leap
LyondellBasell Weighs Strategic Options for Refining Business; Shares Drop 2.3%
Concrete Pumping Holdings Delivers Mixed Q3 Results, Shares Drop 2.8%
