Report from Reuters
In Brief – The US Supreme Court has stepped into the long-running antitrust battle between Apple and Epic Games by choosing to accept Apple’s challenge to Federal Judge Yvonne Gonzalez Roger’s contempt order against the iPhone giant. The High Court’s review will focus on the legal question of whether courts should issue contempt findings based on the “spirit” of an injunction or strictly adhere to its explicit, literal text. The dispute began in 2020 when Epic challenged Apple’s 30% commission on in-app payments. While Epic’s federal antitrust claims failed, Gonzalez Rogers determined that Apple’s anti-steering provisions prohibiting app developers from directing users to alternatives violated California’s unfair competition law, and directed Apple to allow app developer links to alternative payment methods. Apple changed its rules to allow external links but implemented a new commission up to 27 percent. The judge later found Apple in contempt, ruling that the fee violated the “spirit” of her injunction and imposed severe penalties, including entirely prohibiting the Apple commissions. In December, the 9th Circuit Court of Appeals upheld the contempt finding but ruled that Apple had the right to argue for the court to set a commission level above zero. That new effort before Gonzalez Rogers has not yet begun.
Context – Epic’s 2020 antitrust lawsuits against Apple and Google kicked off a global campaign to drive down app store fees. It’s been six years, but they are winning. Google, with a more open ecosystem, lost their US trial. They have negotiated a global settlement with Epic for lower fees and secure third-party app stores. Despite Apple appearing to largely prevail in its trial, Gonzalez Rogers, who made it clear all along that she thought Apple’s fees were too high, imposed an order on Apple that proved as restrictive as what Google faced after losing. While the Supreme Court declined to hear Apple’s initial appeal, they are stepping into the question of the 9th Circuit’s support for judges enforcing the “spirit” of court injunctions. In the meantime, governments in major global markets are moving to strictly regulate the app store giants.