Report from Reuters
In Brief – In the latest development in the five-year antitrust battle between Apple and Epic Games, a three-judge panel of the Ninth Circuit Court of Appeals has rejected key parts of District Judge Yvonne Gonzalez Rogers’ order requiring Apple to allow app developers to direct users to external websites for in-app purchases without any limitations or commissions. The 54-page ruling said, “The district court used blunt force to ban all commissions, abusing its discretion,” and “Apple is entitled to some compensation for the use of its intellectual property that is directly used in permitting Epic and others to consummate linked-out purchases.” Following a 2021 trial, Judge Rogers largely sided with Apple in finding that App Store policies didn’t violate federal antitrust law. However, she ruled that the company violated California law and ordered Apple to allow developers to direct consumers to cheaper alternative payment options. Apple eventually allowed app developers to point users to alternative payment services that did not automatically collect Apple’s commission, traditionally set at 30%, but the iPhone giant imposed a new 27% commission on purchases made using the alternative transaction methods. Epic challenged the new regime and Rogers agreed, blasting Apple in a contempt order, ordering it to allow app developers to direct users to alternative purchasing sites without limitations or any commissions, and deriding the 27% fee as barely less than the 30% she called and windfall and “supracompetitive.”
Context – While Judge Rogers sided with Apple on the federal antitrust charges in 2021, she called them an “incipient monopolist” in her ruling and was skeptical that they deserved 30% commissions. Despite Epic’s lawsuit being about payments processing, and Rogers’s original injunction being about anti-steering, the real issue was always Apple’s fees, meaning prices. And who sets them. It looks like the answer is still Judge Rogers, but she cannot select zero percent again. Globally, Apple (and Google) face similar demands in Europe, Japan, South Korea and India, with each new result fueling more.