Report from the BBC
In Brief – Apple has petitioned the Ninth Circuit Court of Appeals to block a court order from District Judge Yvonne Gonzalez Rogers requiring it to permit all app developers to direct users to external websites for in-app purchases without limitations and prohibits Apple from charging any commissions on those purchases. The company’s motion argues that “a federal court cannot force Apple to permanently give away free access to its products and services, including intellectual property,” and that the judge unlawfully prevents it from controlling “core aspects of its business operations.” Rogers alleges that Apple willfully failed to abide by her initial injunction ordering the company to stop engaging in “anti-steering” practices that prohibited app developers from informing their users of alternative ways to buy in-app content outside the App Store. Although the judge found in Apple’s favor on the federal antitrust claims brought by Epic Games, a giant app developer, she then ruled that the iPhone maker’s anti-steering practices violated California’s unfair competition law. Apple eventually instituted new App Store processes that warned users about pursuing developer prompts to engage in purchases outside of Apple’s payments system, and charged app developers a 27% commission, which Rogers derided as being barely less than the 30% fee she called “supracompetitive”.
Context – Despite ruling that Apple did not violate federal antitrust law, Judge Rogers called Apple an incipient monopolist and was consistently skeptical that the company deserves to charge 30% commissions. Her initial order used “supracompetitive” 13 times, and in a hearing last year she called Apple’s app fees a “windfall”. An Apple executive responded, “We are running a business.” Despite the Epic lawsuit being about payments processing, and the initial injunction being about anti-steering, the real issue has always been Apple’s fee level, meaning prices. And who will set them. The Ninth Circuit largely upheld Judge Rogers’ initial ruling in 2023. And the Supreme Court rejected Apple’s appeal of the nationwide reach of the trial judge’s injunction. Maybe they will consider the extent to which a federal judge can take over a company’s pricing.