Apple Wins Bid to Delay App Store Payment Rule Changes
The decision is a blow to Epic Games and other app developers that are required to give the tech giant a commission on all transactions in the App Store.
Apple will get to keep rules barring developers from directing users to avenues that allow them to bypass a commission on sales in the App Store, where the company exacts a toll of up to 30 percent on all transactions, pending an appeal to the U.S. Supreme Court.
Justice Elena Kagan on Wednesday denied a bid from Epic Games to lift a federal appeals court’s ruling that allowed Apple to delay implementing changes to App Store payment rules. In July, the 9th U.S. Circuit Court of Appeals put the injunction on hold after affirming a federal judge’s decision that certain provisions effectively keeping users locked into Apple’s payment ecosystem and limiting the ability of developers to communicate about alternative payment options is illegal.
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Epic Games had argued that the federal appeals court improperly granted a stay, pointing to the low chance that the Supreme Court reviews the case and overturns the ruling. It stressed that permitting Apple to maintain its rules will hurt the company as well as “innumerable consumers and other app developers for a significant period of time.”
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In the legal battle waged by Epic Games, creator of Fortnite, the gamemaker looked to permit an alternative payment system on the App Store and permit companies to offer their own app marketplaces. It argued that Apple violates antitrust laws as the lone distributor of apps and essentially imposes a toll to reach more than 1.5 billion iPhone users.
Although she stopped short of finding an illegal monopoly, U.S. District Judge Yvonne Gonzalez Rogers found that Apple engaged in anticompetitive conduct under California’s unfair competition law by barring developers from pointing users to payment options outside of the App Store. She concluded the rules “illegally stifle consumer choice.”
In the mixed ruling, the judge indicated that Apple is “near the precipice” of monopoly power in the market for mobile gaming transactions. “Apple is only saved by the fact that its share is not higher, that competitors from related submarkets are making inroads into the mobile gaming submarket, and perhaps because plaintiff did not focus on this topic,” she wrote.
Apple in 2017 had a market share of roughly 57 percent of the global mobile gaming industry, according to the court’s review of internal company documents. This accounted for roughly 76 percent of the company’s revenue form the App Store.
This article was originally published by The Hollywood Reporter.
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