Apple stock experienced a 2% decline on Tuesday following a Supreme Court ruling that could potentially result in the company losing billions of dollars in annual revenue from its app store. The ruling dismissed Apple's appeal in an antitrust lawsuit that challenged the company's app-store fees.
The lower court had previously determined that certain rules within Apple's app store constituted unfair competition. However, with the Supreme Court's decision, app developers will now have the option to offer alternative payment methods for iPhone users, potentially bypassing Apple's commissions.
Apple currently collects commissions ranging from 15% to 30% for digital goods and subscriptions. A Bloomberg report, citing Sensor Tower data, suggests that in-app spending could reach $182 billion by 2024 and $207 billion by 2025.
The 9th US Circuit Court of Appeals ruled last year that Apple violated California's Unfair Competition Law by limiting developers' ability to present alternative payment methods. Epic Games, the company behind the popular game Fortnite, initially filed the antitrust lawsuit, challenging Apple's app store setup. Epic Games attempted to avoid paying Apple commissions by finding an alternative method to distribute its app on Apple's platform.
In Epic's case, the court found that Apple cannot prevent app owners from informing customers about alternative payment methods outside of Apple's ecosystem.
Additionally, Apple's stock faced further pressure on Tuesday as the company began offering rare discounts on its latest iPhone models in China. This move raised concerns about weakening demand for Apple products in the Chinese market.
These recent events have had a negative impact on Apple's stock performance, with the Supreme Court ruling potentially leading to significant revenue losses from the app store and the price cuts in China sparking fears about weakening demand.