Apple is returning to a U.S. federal appeals court on Tuesday to challenge a ruling that prevents the company from charging commissions on transactions occurring outside the App Store, effectively requiring it to allow links to cheaper payment alternatives for free.
Josh Sisco for Bloomberg News:
The hearing before the 9th Circuit Court of Appeals in San Francisco is the latest twist in a more than five-year saga pitting the tech giant against Epic Games Inc., maker of the popular Fortnite game.
Apple is appealing an April ruling from US District Judge Yvonne Gonzalez Rogers that the company “willfully” defied her 2021 order to open up its App Store, which brings in billions of dollars annually for the company from the commissions it takes on digital sales.
The April ruling blocks Apple from charging commissions on transactions that take place outside the App Store. It also limits Apple from placing restrictions on the language and design that developers use to send customers to their own websites to make sales. The same three judges who upheld Rogers’ earlier 2021 decision will hear the current appeal.
Following a 2021 trial, Gonzalez Rogers largely sided with Apple in finding that its App Store policies didn’t defy federal antitrust law. However, she found the company violated California state law and ordered Apple to allow developers to direct consumers to cheaper payment options online. The ruling was upheld by the 9th Circuit and US Supreme Court.
In response, Apple allowed developers to point users to the web for transactions, but it imposed a new 27% commission on revenue generated that way. Epic then accused Apple of flouting the 2021 ruling by imposing the new commission along with other restrictions on the placement and design of links.
After several weeks of hearings, Rogers concluded that Apple “willfully” violated her injunction and referred the company to federal prosecutors for a possible criminal probe.
MacDailyNews Take: Apple has a right to charge for advertising – in this case, advertising of lower prices elsewhere – in its App Store.
Rogers’ order is ludicrous and should be overturned on appeal as it basically says that Apple has no right to charge for advertising in its own store.
This is akin to a judge forcing Best Buy and Target to place signs next to each product that advertise lower prices for the same items at Walmart…
If developers like Epic Games want to advertise lower prices [to be had elsewhere via] Apple’s App Store, Apple should simply begin charging an “In-Store Advertising” fee, because that’s exactly what it would be. – MacDailyNews, July 27, 2023
The bottom line is clear: Epic Games wants to enjoy all of the benefits of Apple’s App Store, including access to well over one billion of the world’s most affluent users for free. That is illogical, unfair, and, basically, theft. – MacDailyNews, May 4, 2021
How much did it cost developers to have their apps burned onto CDs, boxed, shipped, displayed on store shelves prior to Apple remaking the world for the better for umpteenth time? Apple incurs costs to store, review, organize, surface, and distribute apps to over one billion users. — MacDailyNews, June 10, 2022
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