Apple is awarded a stay meaning that App Store rules remain the same for now

Apple is awarded a stay meaning that App Store rules remain the same for now
Apple had filed for a stay putting a hold on a ruling made in September by Judge Yvonne Gonzalez Rogers who presided over the court battle between Epic Games and Apple. The judge ruled that while Apple was not a monopolist and that there is nothing illegal about success, Apple would have to allow app developers to post a link or communicate to their customers how they could be sent to a third-party in-app payment system to avoid Apple's.

Judge Gonzalez Rodriguez had rejected Apple's first demand for a stay in November saying that she took into consideration that Apple could block implementation of her ruling for years to come. Apple appealed that decision to the Ninth U.S. Circuit Court of Appeals which today ruled in Apple's favor. According to The Wall Street Journal, the appeals court granted Apple's request to delay the implementation of the new rules that would have allowed app developers to lead their customers to third-party in-app payment platforms (bypassing Apple's in-app payment platform).

Without the stay, Apple would have been forced to follow Judge Gonzalez Rodriguez's ruling on December 9th

Apple's in-app payment system collects up to 30% of in-app revenue which leaves developers collecting less money than they should be, and customers paying more for in-app purchases. In a last ditch effort to keep the status quo for a while, Apple filed the appeal and sought a stay of the injunction which would have taken effect tomorrow, December 9th. In that last-minute filing made by Apple late last month, the company said that allowing immediate implementation of Judge Gonzalez Rodriguez's order would hurt “millions of participants on both sides of the App Store platform.

With its ruling Wednesday, the appeals court said, "Apple has demonstrated, 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 lawsuit was filed by Epic back in August 2020 after Apple kicked Epic's popular Fortnite game out of the App Store after the game developer notified Fortnite players that they could buy in-app accessories for the game-such as V-Bucks -from Epic's own in-app payment platform and save money. For example, instead of paying $9.99 for 1,000 V-Bucks via the App Store, players could make the same purchase directly from Epic for $7.99.

In the U.S. Apple can continue to block app developers from linking to third-party payment platforms

Apple responded to today's ruling by making a statement. "We’re constantly evolving the App Store to help create an even better experience for our users and the incredibly talented community of iOS developers," Apple said. "Our concern is that these changes would have created new privacy and security risks, and disrupted the user experience customers love about the App Store. We want to thank the court for granting this stay while the appeals process continues."

Apple thought that it won the case back in September when the judge refused a request by Epic to order Apple to allow the Epic app store to be sideloaded on the iPhone. When the first decision was made, Denver antitrust attorney Paul Swanson said, "Big Tech was watching this case because it addressed whether antitrust law will countenance successful walled gardens. While we got a bit of a mixed answer, I think the chief takeaway is that 'success is not illegal' and a walled garden like Apple's, which competes with other facilitators of digital mobile gaming transactions, is not unlawful."

In the U.S. at least, Apple can continue collecting its 15-30% commission on in-app purchases and the apps that are opposed to this, such as Spotify, Epic, and Netflix can continue to block consumers from paying for subscriptions directly from the App Store. This doesn't include the new Netflix Games app which will allow subscribers to sign up via the App Store.

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