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What Apple Settling App Store Lawsuit Means for Crypto NFTs

Apple has agreed to loosen restrictions on small developers in a move that could further expand the NFT market.

Sep 3, 2021
CoinDesk Insights

When news broke last week that Apple would be settling a class-action lawsuit brought by developers in 2019, Crypto Twitter fell silent.

But those who understood the momentous event realized the potential ramifications of the U.S. tech giant loosening its grip for various sectors across the blockchain industry, particularly as it relates to non-fungible tokens (NFTs).

NFTs are unique assets that grant gamers and collectors full ownership over their digital items. Readers may recall the time when artist Beeple sold a piece of digital artwork for a mind-blowing $69.3 million at auction earlier this year. The sector has since caught fire, with everyone from celebrities to charities and news organizations attempting to tap into the craze.

And while cryptocurrencies are still being worked out as a means of efficient and acceptable forms of payment in the mainstream, NFTs continue to forge new ground.

“Regardless of whether cryptocurrencies become a common form of payment in the “real world,” they’re increasingly being used in gaming via NFTs and blockchain-based studios,” venture capitalist Mathew Ball wrote in a blog post in June.

Ball argues the main reason most crypto games and NFT platforms are solely browser-based and not packaged in iOS apps is because of Apple’s restrictions on small developers.

On August 26, Apple agreed to loosen App Store restrictions on small developers in a legal settlement that could see Apple fork over $100 million and allow developers to direct consumers to payment rails outside of the store. As MarketWatch reported, this would allow developers to avoid fees of up to 30% that Apple charges for online purchases in iOS apps.

The Cameron et al v. Apple Inc. settlement is pending approval by Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California.

If all goes well, Apple will also allow developers worldwide to directly discuss with customers about alternative payment methods using data gathered, pending customer permission, from inside their apps.

The extension provided to NFTs would present a momentous win to developers and creators behind the crypto-based projects who would suddenly gain access to a vast trove of tech-savvy users, according to some.

“This is a landmark case for the NFT industry,” said Simon Kertonegoro, CEO of MyMetaverse and marketing adviser at NFT powerhouse Enjin. “In the near future, NFTs will be sold on websites, games, apps and decentralized marketplaces all over the internet. Users will then want to be able to plug those NFTs into iOS apps and enjoy their in-app utility.”

Kertonegoro joins a growing list of NFT advocates who believe the Apple settlement is a “big step” toward the tech giant becoming an ecosystem that can “fully support NFTs.”

Legal woes

Developer fees, as well as Apple’s rules requiring the use of the tech giant’s payment options from inside apps with no alternative payment methods, also form a large part of a separate legal battle brought by Fortnite videogame developer Epic Games.

Epic Games Inc. v. Apple is considered a landmark antitrust case currently being presided over by the same judge overseeing the Cameron et al v. Apple Inc. settlement.

Last weeks’ proposal strikes at the very heart of concerns for small developers making less than $1 million per year. It also is the first major concession Apple has made amid a number of antitrust investigations. Apple defended the practices of its App Store, which keeps tight rules against developers using contact information accrued from customers who sign up via the App Store.

In a statement last week, Apple said it “appreciates the developer feedback” that helped inform the settlement agreement, and that the tech giant “respects the ongoing judicial review process” while praising its App Store as “an economic miracle.”

Pending approval, the agreement stipulates that developers can share payment options with customers outside of Apple’s iOS app, expand on subscription price points as well as in-app purchases, and Apple will set up a new fund to assist U.S. developers.

“Apple allowing developers to accept payments directly from consumers outside of their App Store is a big win for the NFT industry,” said Mateen Soudagar, a blogger and investor in blockchain and NFT’s. “There is no doubt a huge [number] of device users in the world are mobile-based and so being able to expand the offering of current games, marketplaces, collectible projects and other Web 3/NFT based projects to a huge new, digital native user base is incredible for the industry.”

Soudagar, like his contemporaries, believes the settlement will have a significant impact on the NFT industry, which could take on an entirely new form in the coming year.

“I expect the NFT industry to look vastly different ... and expanding to mobile is definitely a catalyst to get there,” Soudagar said.


DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Sebastian Sinclair is a CoinDesk news reporter based in Australia.

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