Photo Credit: Apple Inc.
Apple loses its request to pause a court order requiring it to let app developers direct users to payment options outside the App Store.
On Wednesday, a ruling by a federal appears court in San Francisco has rejected Apple’s request to pause the court order forcing it to allow app developers to steer users to payment options outside the App Store. It’s the latest setback for the tech juggernaut in a long-running court battle with Fortnite developer Epic Games over the App Store’s anti-competitive conduct.
Initially, Apple had sought a stay on the court order while it appeals a judge’s ruling in April. That ruling determined that Apple must comply with a 2021 injunction issued after the court found the company engaged in anti-competitive conduct, in violation of California law.
“Apple ‘bears the burden of showing that the circumstances justify an exercise of [our] discretion,’” the appeals court wrote. “After reviewing the relevant factors, we are not persuaded that a stay is appropriate.”
“We’ll continue to argue our case during the appeals process,” said a spokesperson for Apple, who noted the company is disappointed with the ruling. “As we’ve said before, we strongly disagree with the district court’s opinion. Our goal is to ensure the App Store remains an incredible opportunity for developers and a safe and trusted experience for our users.”
Meanwhile, Epic Games’ CEO Tim Sweeney applauded the ruling in a social media post. “The long national nightmare of the Apple tax is ended,” he wrote. “May next week’s WWDC be the Apple-led celebration of freedom that developers and users have long deserved.”
Several developers, including Amazon and Spotify, have already changed their apps to allow users to circumvent payment options relegated to the App Store.
The court’s ruling in April blocks the company from charging commissions on transactions linked outside the App Store. It also prevents the company from controlling the language and app design developers use to direct their customers to their own websites to make payments.
Apple argued that the ruling is causing the company “grave irreparable harm.” Further, the company disagrees with US District Judge Yvonne Gonzalez Rogers’ conclusion that Apple did not comply with her 2021 injunction.
Interestingly, Gonzalez Rogers mostly sided with Apple following a trial in 2021, saying that its App Store policies did not violate federal antitrust law. But she ordered the company to allow developers to bypass its in-app payment tool to avoid a commission of as much as 30%. The US Supreme Court upheld that ruling last year when it declined to hear appeals.
As a result of the 2021 injunction, Apple allowed developers to point users to the web to complete transactions—but required developers to pay the company a 27% commission of whatever revenue was generated as a result.
Many developers, including Epic, complained about the new commission and a slew of restrictions Apple placed on their ability to link their customers outside the App Store, such as the design and placement of buttons and links. Epic accused Apple of circumventing the 2021 injunction.
Ultimately, Gonzalez Rogers concluded that Apple “willfully” violated her 2021 injunction, and even referred the company to federal prosecutors for a potential criminal probe of contempt of court.
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