Apple tries Hail Mary appeal to prevent major App Store changes

Apple tries Hail Mary appeal to prevent major App Store changes
Back in September, Judge Yvonne Gonzalez Rogers ruled that while Apple's App Store is not a monopoly and that its success is not illegal, Apple did have to allow developers to link to  in-app payment platforms outside of the App Store. As you know, Apple demands that apps its lists in the App Store must go through Apple's in-app payment platform which gives the tech company a 15% to 30% cut of the revenue.

Apple originally saw the judge's ruling as a victory

Epic Games had its popular Fortnite game kicked out of the App Store when the app started to promote Epic's own in-house payment platform. Going through Epic instead of Apple would save Fortnite players some money on the purchase of in-game currency. That's because without Apple taking its cut, the developer could charge less for in-app purchases.

Epic claimed that Apple was a monopolist for forcing developers to use its payment system only with the threat of being kicked out of the App Store hanging over their heads. In addition, Epic had asked the court to force Apple to install Epic's app store on the iPhone. The judge denied that request and Apple saw the decision as a win with its general counsel Kate Adams saying, "We are very pleased with the court’s ruling and we consider this a huge win for Apple."

Sounding like the loser, Epic CEO Tim Sweeney stated that Epic "will fight on." Sweeney also said that "Today’s ruling isn’t a win for developers or for consumers. Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to customers."

Apple has to comply with an injunction that begins December 9th and has requested a stay in addition to appealing Judge Gonzalez Rogers' original ruling. Today, Apple filed an appeal with the U.S. Court of Appeals for the Ninth Circuit asking it to issue a stay. According to Bloomberg, Apple is asking for a decision by December 8th, the day before the injunction takes effect.

A previous attempt by Apple to obtain a stay from Judge Gonzalez Rogers was denied leaving Apple to try this Hail Mary play. The judge denied the request and said that Apple had been given sufficient time since the original ruling to prepare for the injunction to take effect.

In today's filing Apple wrote, "Given the injunction's effective date of Dec. 9, Apple seeks immediate entry of an administrative stay that would expire 30 days after the Court’s ruling on the stay motion." Without a stay, Apple stated that "The App Store will have to be reconfigured -- to the detriment of consumers, developers, and Apple itself."

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Apple's lock on processing in-app payments made by consumers has been a bone of contention for app developers for years. Some apps, including Netflix, refuse to allow new subscribers to sign up using the App Store. Ironically, those signing up for the new Netflix gaming app can subscribe via the App Store since Netflix Games uses Apple's in-app payment platform.

Apple is asking the court to rule on its request for a stay by December 8th, just one day before the injunction takes effect

The court filing indicates how down-to-the-wire Apple is playing this. It isn't clear what options Apple has if the court doesn't return a decision in time on December 8th. If Apple fails to get a stay, it still has the appeal it filed looking to overturn the original decision. But on December 9th, without a stay, Apple might be forced to allow developers to direct their subscribers to payment system outside the App Store to process in-app purchases.

An estimate released earlier this year by CNBC put Apple's App Store revenue for 2020 at $64 billion. That was a 28% increase from the $50 billion in App Store revenue earned by Apple in 2019. Apple says that it has paid developers $200 billion since 2008.

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