On Monday, Apple was granted a motion putting a hold on the appeals court ruling that would push the company to undo its “anti-steering” rules and let outside developers link to third-party payment mechanisms. The mandate is stayed for 90 days so Apple can file its request that the Supreme Court take up the case.
Apple’s anti-steering rules limit how developers can direct users to subscription or in-app purchase payments outside Apple’s App Store ecosystem, where it takes a cut of revenue. A district court found that Apple had not generally violated antitrust law with its “walled garden” approach to iOS, but it ordered it to drop rules against letting developers include “calls to action” for outside payment methods.
Once that petition is filed, it remains stayed until the Supreme Court decides to hear it, and if it does, until the Supreme Court weighs in.
Despite granting Apple’s request, Circuit Judge Milan D. Smith Jr. writes, “…while the arguments in Apple’s motion may not be technically frivolous, they ignore key aspects of the panel’s reasoning and key factual findings by the district court. When our reasoning and the district court’s findings are considered, Apple’s arguments cannot withstand even the slightest scrutiny. Apple’s standing and scope-of-the-injunction arguments simply masquerade its disagreement with the district court’s findings and objection to state-law liability as contentions of legal error.”
The original ruling in Epic Games v. Apple ordering Apple to remove the anti-steering rules came down in September 2021 after days of testimony in court earlier that year. Both Epic and Apple appealed the ruling, and in April of this year, the Ninth Circuit Court of Appeals upheld the ruling. Now, Apple wants the Supreme Court to take a look at the case, and if it does, the court’s decision could have a huge effect on the future of the app ecosystem as we know it.
Apple’s “anti-steering” rules have been at the center of a legal battle between the tech giant and Epic Games, the developer of the popular game Fortnite. These rules restrict how developers can direct users to make payments outside of Apple’s App Store, where Apple takes a 30% cut of revenue. Epic Games argued that this practice constituted anticompetitive behavior, while Apple maintained that it was necessary to maintain the security and integrity of its platform.
In September 2021, a district court ruled in favor of Epic Games, ordering Apple to remove the anti-steering rules. The court found that while Apple’s walled garden approach to iOS did not violate antitrust law, the restrictions on external payment methods were anticompetitive. The court’s ruling allowed developers to include “calls to action” for outside payment methods, giving users more options and potentially reducing Apple’s control over in-app purchases.
Both Epic Games and Apple appealed the district court’s ruling, leading to the recent decision by the Ninth Circuit Court of Appeals. In April 2023, the appeals court upheld the district court’s decision, affirming that Apple must remove the anti-steering rules. However, Apple has now been granted a temporary hold on the ruling, allowing them to file a request with the Supreme Court to hear the case.
The outcome of this legal battle could have far-reaching implications for the app ecosystem. If the Supreme Court agrees to take up the case and ultimately sides with Epic Games, it could force significant changes to Apple’s App Store policies. Developers would have more freedom to direct users to alternative payment mechanisms, potentially reducing the revenue that Apple generates from in-app purchases. This could also open the door for increased competition within the app market, benefiting both developers and consumers.
However, if the Supreme Court rejects Apple’s request to hear the case or ultimately upholds their anti-steering rules, it would solidify Apple’s control over in-app purchases and the App Store ecosystem. This outcome would likely disappoint developers who have been advocating for greater flexibility and competition within the iOS platform.
The legal battle between Apple and Epic Games is just one example of the ongoing scrutiny faced by major tech companies regarding their market dominance and alleged anticompetitive practices. Governments around the world are increasingly examining the power wielded by these companies and considering regulatory changes to ensure a more level playing field.
In the case of Apple, the outcome of this legal battle could shape the future of the app ecosystem and have implications for the broader tech industry. It is yet to be seen whether the Supreme Court will take up the case, but regardless of the outcome, the discussion around app store policies and antitrust concerns is likely to continue. As technology continues to evolve, it is crucial to strike a balance between innovation, competition, and consumer protection in the digital marketplace.
