The federal appeals court has issued a ruling declaring Apple’s 30% tax on in-app purchases of NFTs as illegal. This decision could significantly disrupt the way NFTs are sold and bought on the popular app store. Additionally, the ruling could greatly impact the NFT community. Let’s dive in!
Epic Games Makes History with Landmark Ruling Against Apple’s 30% NFT Tax
Epic Games has made history with its successful case against Apple’s 30% tax on NFT transactions. The U.S. Court of Appeals for the Ninth Circuit ruled that Apple’s App Store policies were anti-competitive and in violation of California’s Unfair Competition Law. The decision declared that Apple’s mandate for developers to use their in-app payment system for NFT transactions stifled innovation and hindered competition within the market. This landmark ruling is sure to shake up the NFT industry and could have far-reaching consequences for app store policies.
Notably, the ruling was part of a re-evaluation of a lawsuit brought by Epic Games, the company that made Fortnite, against Apple in 2020. On Monday, a panel of judges re-evaluated the lawsuit Epic Games filed claiming that the tech giant had a monopoly on the mobile game market. Significantly, Apple won most of the claim. But, the panel upheld the initial judge’s conclusion that Apple impeded competition. This decision has significant implications for the way Apple does business moving forward.
Epic Games and the broader crypto industry achieved a significant triumph with this ruling. Markedly, it could potentially lead to lower NFT prices and increased market competition. Moreover, developers could find it easier to create and sell NFTs on iOS devices. “This is a big win for consumers and developers alike,” said Tim Sweeney, CEO of Epic Games. He also added that “Apple’s anti-competitive practices have stifled innovation and competition in the NFT market for too long. This ruling is a step in the right direction.”
If the court ruling remains, Web3 app developers may benefit in numerous ways. Although Apple allowed NFTs on its App Store last year, NFTs could only be sold through Apple’s own payment system. Additionally, this took a significant 30% cut of most transactions. The Web3 community reacted negatively to the system. This is because the App Store presents a tremendous opportunity for Web3 companies seeking mainstream adoption.
Furthermore, most developers were unable to take advantage of this opportunity due to Apple’s payment policies. Prominent NFT marketplace, OpenSea, had previously charged a 2.5% commission on NFT sales. But, it recently eliminated this fee to better compete with rivals.
In October, Apple specified in its policies that NFTs used to unlock additional content or features in an app could only be purchased through its in-app payment system. This policy change created a more difficult environment for NFT-powered apps to be sold in the App Store. Moreover, the move placed additional restrictions on token-gating, merchandise, and other perks. Apple also required developers to accept its 30% share of sales.
However, the community expect Apple to appeal. Ultimately, this ruling deals a significant blow to the company, which has faced extensive criticism for its App Store policies. The ruling’s outcome is still uncertain, but it could have a profound impact on the NFT market and the entire crypto industry.