Apple loses court attempt to halt app bypassing App Store fees
Apple’s attempt to halt a court ruling that permits apps to circumvent App Store fees has been unsuccessful. Apple Inc. has been denied its request to suspend a court order mandating that it allow App Store developers to direct users to the web for purchasing in-app items without incurring a commission. The ruling issued on Wednesday by a federal appeals court in San Francisco represents yet another setback for the iPhone manufacturer in its protracted legal battle with Epic Games Inc., the creator of Fortnite, concerning the supremacy of the smartphone software market through its App Store.
Apple requested a suspension as it appeals a judge’s April ruling mandating compliance with a 2021 injunction, which was issued after determining that the company had engaged in anticompetitive conduct in violation of California law. “Apple ‘bears the burden of showing that the circumstances justify an exercise of our discretion,’” stated the appeals court in a brief, unsigned opinion spanning two pages. “After reviewing the relevant factors, we are not persuaded that a stay is appropriate.”
An Apple spokesperson expressed disappointment with the ruling. “We’ll continue to argue our case during the appeals process,” the spokesperson stated. “As we’ve stated previously, we firmly oppose the district court’s opinion. Our objective is to guarantee that the App Store continues to be a remarkable opportunity for developers while providing a secure and reliable experience for our users.”
Tim Sweeney, the chief executive officer of Epic, praised the ruling in a post on social media platform X. “The 9th Circuit Court denies Apple’s stay.” The prolonged national ordeal of the Apple tax has come to a conclusion. May next week’s WWDC serve as the Apple-led celebration of freedom that developers and users have long deserved. The April ruling diminishes the substantial income that the App Store produces for Apple. The ruling prevents the company from imposing commissions on transactions that occur outside the App Store and restricts its ability to dictate the language and app design that developers employ to direct their customers to their own websites for payment processing.
Apple contended to the appeals court that the decision made by US District Judge Yvonne Gonzalez Rogers in Oakland, California, is inflicting upon the company “grave irreparable harm.” The iPhone maker further argues that Gonzalez Rogers made a mistake in determining that it failed to adhere to her 2021 injunction. Several developers, including Epic, Amazon, and Spotify, have already modified their applications to enable customers to bypass Apple’s payment methods. In the aftermath of a trial in 2021, Gonzalez Rogers predominantly aligned with Apple, asserting that the company’s App Store policies did not infringe upon federal antitrust legislation. However, she mandated that the company allow developers to circumvent its in-app payment tool to evade a commission of up to 30 percent. The US Supreme Court ultimately upheld the ruling last year by declining to hear appeals in the case.
In light of the 2021 injunction, Apple permitted developers to direct users to the web for completing transactions related to in-app purchases. However, the company mandated that developers remit a 27 per cent share of any revenue they generated. Epic and other developers expressed dissatisfaction regarding the newly implemented commission and a range of limitations imposed by Apple on their capacity to link outside the App Store, which encompassed the design and positioning of buttons. Epic has accused Apple of violating the 2021 injunction, which resulted in the ruling made in April. Following an extensive series of hearings over the past year, Gonzalez Rogers determined that Apple “willfully” breached her injunction from four years prior. She additionally directed the company to federal prosecutors for a potential criminal investigation regarding contempt of court.
