A U.S. appeals court has largely upheld sanctions against Apple for violating a previous court order, marking a significant legal setback for the technology giant in its long-running dispute with Epic Games. The decision, delivered on Thursday, casts new scrutiny on the lucrative App Store operations and coincides with a wave of executive departures from the company.
Legal Setback and Its Implications
The Ninth Circuit Court of Appeals ruled that Apple had failed to comply with a 2021 injunction requiring it to permit developers to include links to alternative payment systems outside the App Store. While a three-judge panel modified part of the original order that had entirely prohibited Apple from collecting commissions on external purchases, the core mandate stands. A critical modification now allows Apple to charge what the court termed “reasonable commissions” on purchases originating from these external links.
Tim Sweeney, CEO of Epic Games, hailed the judgment as a pivotal victory. “Following years of obstruction by Apple, we will finally witness comprehensive changes,” he stated. Until now, Apple has enforced a 27% commission rate on purchases made within seven days of a user clicking an in-app link—a figure only marginally below the standard 30% App Store fee. This practice is now expected to face intensified legal examination.
Broader Business and Regulatory Context
This legal defeat arrives during a delicate period for Apple, presenting multiple concurrent challenges:
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- Pressure on a Core Profit Center: The App Store generates billions of dollars annually in high-margin commission revenue, a business model now under direct threat.
- Escalating Regulatory Scrutiny: Similar antitrust proceedings are underway in the European Union and other key global markets, amplifying compliance risks.
- Leadership Transition: The company has recently seen the exit of several high-ranking managers, adding a layer of internal change.
Market reaction to the news was muted. Apple shares closed at $278.03 on December 11, representing a decline of 0.27%. In after-hours trading, the stock saw a modest recovery, edging up to $278.96.
Market Analysts Maintain a Measured Outlook
Despite this judicial blow, financial observers continue to express a generally optimistic view of Apple’s prospects. The company’s valuation is primarily anchored by the enduring strength of its iPhone division and the consistent expansion of its broader Services segment. While App Store commissions constitute a notably profitable revenue stream, they represent only a portion of the overall services business.
A central unresolved question is how significantly Apple will be compelled to reduce its commission rates for external purchases to meet the court’s “reasonable” standard. By leaving this definition open, the judicial panel has effectively established grounds for further negotiation and potential future legal clarification.
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