Apple appeals App Store restrictions in Epic Games legal battle
What's the story
Apple has appealed to a US court, seeking to overturn a federal judge's order that prevents it from collecting commissions on certain app purchases. The tech giant also wants the court to reverse a contempt finding against it for allegedly violating an earlier ruling in the ongoing legal battle with Epic Games, the developer of popular video game Fortnite.
Legal stance
Apple's attorney argues against restrictions on App Store
Apple's attorney Gregory Garre of Latham & Watkins argued before the San Francisco-based 9th US Circuit Court of Appeals that a district judge had wrongly broadened restrictions on its App Store. The original restrictions were imposed earlier in the lawsuit as a result of Epic Games' legal action. In 2021, US District Judge Yvonne Gonzalez Rogers said Apple must make it easier for developers to direct consumers toward potentially cheaper non-Apple payment options.
Compliance dispute
Apple should be compensated for 'unparalleled innovations': Garre
After Epic Games complained about Apple's non-compliance, Judge Gonzalez Rogers ruled in April that the company had violated her order. She imposed a new injunction barring Apple from imposing commissions on off-app purchases. Garre defended Apple, arguing it deserves some compensation for developers' access to its "unparalleled parallel innovations" and vast user base. He also said Apple is "prepared to come forward with an appropriate commission and justify it."
Ruling impact
Circuit Judge expresses concerns over lower court's ruling
Circuit Judge Milan Smith expressed concerns over the far-reaching implications of the lower court's April ruling. He said, "That's quite a penalty. We're talking billions of dollars," referring to the injunction barring commissions. The case stems from Epic Games' 2020 lawsuit against Apple, challenging its control over transactions in iOS apps and distribution restrictions on consumers.
Policy changes
Apple ordered to let developers include links in apps
Apple mostly won the lawsuit but was ordered by Judge Rogers in 2021 to let developers include links in their apps directing users to alternative purchasing methods. The company removed old restrictions but imposed new ones, including a 27% commission on developers for purchases made outside the App Store within seven days of clicking a link. For purchases within the App Store, Apple charges developers a 30% commission fee.
Allegations
Epic Games accuses Apple of violating original order
Epic Games has accused Apple of violating the original order with its new commission and design rules. The game developer's lawyer Gary Bornstein said at the hearing that Apple shouldn't be given another chance to argue for a commission rate after allegedly misleading the court. The appeals court could rule later this year or early next year, with either side having the option to petition the US Supreme Court for review.