Epic Lawsuit Over Apple's In-App Payment Rules Dealt A Last-Minute Blow
Like a basketball player heaving a half-court shot as time expires, Apple scored a buzzer-beater of its own, but in a different kind of court. That would be the United States Court of Appeals for the Ninth Circuit—it granted Apple's request for a permanent injunction on a previous ruling that required it to allow app developers to inject external links to payment systems outside of the App Store, thereby bypassing Apple's royalty fees.
The ongoing dispute kicked into high gear when Epic Games updated its Fortnite app on iOS to allow for external payments, as part of Project Liberty. This went against Apple's rules and the developer agreement that Epic Games was bound to follow, and as a result Apple booted Fortnite from the App Store. Epic anticipated the move, and thus began a series of legal battles.
Then in September, presiding Judge Yvonne Gonzalez-Rogers partially ruled in Epic's favor, saying effective December 9, 2021 (today), Apple could no longer disallow external links and payment buttons in apps. In essence, if a developer like Epic wanted to link users to a payment system outside of the App Store for in-game purchases, it would be able to. However, Epic and other developers still wouldn't be allowed to process payments in the app without owing Apple money.
That date has arrived, but thanks to a successful last-minute appeal, Apple doesn't have to change a thing—it can still disallow external links.
A two-judge panel wrote, "Apple has determined, at minimum, that its appeal raises serious questions on the merits of the district court’s determination that Epic Games, Inc. failed to
show Apple’s conduct violated any antitrust laws but did show that the same
conduct violated California’s Unfair Competition Law."
The panel also agreed that Apple "made a sufficient showing of irreparable harm." Apple had argued that if it was forced to allow developers to link users externally to process payments, it would create "new privacy and security risks," and disrupt the overall customer experience.
Apple charges developers up to a 30 percent commission on in-app purchases. It's still possible that Epic will win in the long-run, but it could be years before this matter is settled for good. In the meantime, Apple's appeal victory (PDF) means the core structure stays the same for now.
