Apple won a partial reprieve but suffered a significant setback after a US federal appeals court on Thursday largely upheld a blistering contempt ruling that accused the iPhone maker of defying orders to loosen its tight grip over payments on the App Store.
The Ninth US Circuit Court of Appeals agreed with Judge Yvonne Gonzalez Rogers’ April finding that Apple sidestepped a 2021 injunction requiring it to let developers direct users to alternative payment systems. The order stemmed from Epic Games’ 2020 challenge to Apple’s tightly controlled “walled garden”.
Epic, the maker of Fortnite, has long argued that Apple’s rules and commissions created a price-gouging ecosystem amounting to an illegal monopoly.
Although the trial court in 2021 stopped short of declaring Apple a monopolist, it did order the company to permit “link-out” options inside apps so consumers could pay through rival systems.
Apple technically complied but soon imposed a 27 per cent commission on purchases made outside its platform within seven days of a user tapping those links, only marginally lower than the 30 per cent fee for transactions inside the App Store.
Few developers were convinced. Epic accused Apple of contempt, saying the company had replaced one barrier with another. Judge Gonzalez Rogers agreed, branding Apple’s revised rules a “sham” and referring the matter to federal prosecutors for possible criminal contempt.
The appeals panel on Thursday backed the core of Gonzalez Rogers’ contempt finding but ruled that one part of her order was too broad. It struck down the sweeping ban on any commission tied to off-App-Store purchases.
It said Apple should have the opportunity to seek a “reasonable” fee on external transactions, though with proper limits. The case now returns to the lower court to determine what that fair commission might be.
Epic chief executive Tim Sweeney hailed the decision, saying it prevents Apple from imposing “giant junk fees” and marks the beginning of “large-scale change”. Apple did not immediately comment.
