Apple's App Store anti-steering rules put on hold as it appeals Supreme Court

Posted:
in General Discussion

Apple has been granted a motion to put on hold a decision forcing the company to change its "anti-steering" rules within the App Store, giving Apple a bit more time to move forward with an appeal.

Apple App Store
Apple App Store



Apple was granted the motion to put on hold the previous appeals court ruling on Monday. With this mandate in place, it gives Apple an additional 90 days before it would need to make any changes related to "anti-steering" rules within the App Store, which all stems from the initial Epic Games vs Apple lawsuit.

With this motion, Apple is now appealing the Supreme Court of the United States, asking the ruling body to look over the ongoing case and the subsequent appeals.

As noted by The Verge, if SCOTUS does decide to hear the case, then it will remain stayed even longer, until the ruling body weighs in. Depending on that decision, if one does come down, it could result in major changes to Apple's digital storefront.

Apple's App Store tax has been a hot button issue for quite some time, especially for companies like Epic and Spotify. Apple's anti-steering rules are designed to limit how third-party developers and companies can direct customers to in-app purchases and subscription payments outside the App Store.

Apple takes a cut of all payments done from the App Store ecosystem, which courts have ruled does not violate any antitrust laws. However, it has also been ruled that those same third-party entities should be able to call to attention other ways to pay for things or subscribe to services.

It's worth noting that some companies, like Spotify, simply don't allow customers to sign up for their subscription services using Apple's proprietary payment system anymore.

The original ruling regarding Apple's anti-steering rules was handed down in September 2021, directly related to Epic Games vs Apple. Both companies appealed those decisions, though, with Apple winning nine of the ten claims.

That tenth claim covered anti-steering efforts. In April of this year, the Ninth Circuit Court of Appeals upheld that original ruling, meaning Apple still does need to make changes to the App Store.

Unless the Supreme Court rules otherwise.

A never-ending epic



This all started in 2020 after Epic Games updated its ridiculously popular battle royale game, Fortnite to allow players to avoid Apple's payment system entirely and pay Epic Games directly. This allowed Epic to skirt Apple's digital storefront tax, which ruffled Apple's feathers.

Epic Games ad inspired by Apple's
Epic Games ad inspired by Apple's "1984" ad



Apple subsequently pulled Fortnite from the App Store, letting Epic Games know if they updated the title again and removed the new payment system option, the game could return. Epic Games refused, filing a lawsuit against Apple the same day they updated the game.

Eventually, the court case itself kicked off, and both sides saw ups and downs. However, it has primarily been Apple that's come out on top, at least in the U.S.

That may change with the decision from the Supreme Court, though, if they decide to hear the case.

Read on AppleInsider

FileMakerFellerBiCC

Comments

  • Reply 1 of 17
    That's a great article and update.  Both Epic and Apple have sound arguments.  But it is on Apple Hardware and Software (Operating System) - I don't have a Dog in this fight.  This case is huge.  At the end of the day Apple hosts on their servers but Epic does too.  They each conform to code - literally. If I were a Justice, I would skip class on this one.
    williamlondon
  • Reply 2 of 17
    zeus423zeus423 Posts: 251member
    Apple's App Store tax has been a hot button issue for quite some time…”

    Not everyone agrees that it is a “tax.” Can I sell goods on eBay without paying a fee? It’s simply the cost of doing business. If companies don’t like it, build the fee into the price. 
    jeffharrisJaiOh81ronnpscooter63watto_cobraBart Yaderutterwilliamlondon
  • Reply 3 of 17
    zeus423 said:
    Apple's App Store tax has been a hot button issue for quite some time…”

    Not everyone agrees that it is a “tax.” Can I sell goods on eBay without paying a fee? It’s simply the cost of doing business. If companies don’t like it, build the fee into the price. 

    You just broke your own argument. "Build the Fee into the price" - that's called TAX.  Put it on the Price Tag like Euro Trash or put it on the Receipt Canadian and American Style.  It's still a Tax. 
    williamlondon
  • Reply 4 of 17
    AppleZuluAppleZulu Posts: 2,098member
    1. A fee charged by a private company is not a tax. Governments impose taxes. Private companies do not.

    2. In the United States, you do not ‘appeal the Supreme Court.’ The Supreme Court is the highest court. You can appeal a District Court decision to a US Court of Appeals for the relevant Circuit, and you can appeal a decision of a US Court of Appeals to the Supreme Court, but that’s the end of the judicial road.  You cannot ‘appeal the Supreme Court.’ Apple is seeking to appeal a decision of the 9th Circuit Court of Appeals to the Supreme Court. 
    ronnchasmwatto_cobraBart Yaderutterwilliamlondon
  • Reply 5 of 17
    Wesley HilliardWesley Hilliard Posts: 223member, administrator, moderator, editor
    Semantics will be the death of humanity.

    I'll offer this: Apple's 30% charge is a commission. However, some people refer to it as a tax as a way to slight the idea of the payment as being unjustified.

    Yes, tax has a literal meaning, and Apple isn't a government. But sometimes, colloquialisms will win out.

    And the title doesn't say Apple is appealing a Supreme Court ruling. It says Apple is appealing the Supreme Court, which in this context means making a request -- if you want to be semantic about it.

    Remember, feel free to discuss the topic, but don't criticize how we cover the topic, titles, or even typos in forums. It tends to derail conversations. If you have concerns about what we've covered or the titles we use, email us.

    It's in the Forum rules. Don't make us smack you with a rule violation or eventual ban. Play nice here, folks. I shouldn't have to keep banging this drum, but I will.
    gatorguyJaiOh81BiCCpscooter63chasmwatto_cobramuthuk_vanalingamBart Ybeowulfschmidtwilliamlondon
  • Reply 6 of 17
    mayflymayfly Posts: 385member
    Semantics will be the death of humanity.

    I'll offer this: Apple's 30% charge is a commission. However, some people refer to it as a tax as a way to slight the idea of the payment as being unjustified.

    Yes, tax has a literal meaning, and Apple isn't a government. But sometimes, colloquialisms will win out.

    And the title doesn't say Apple is appealing a Supreme Court ruling. It says Apple is appealing the Supreme Court, which in this context means making a request -- if you want to be semantic about it.

    Remember, feel free to discuss the topic, but don't criticize how we cover the topic, titles, or even typos in forums. It tends to derail conversations. If you have concerns about what we've covered or the titles we use, email us.

    It's in the Forum rules. Don't make us smack you with a rule violation or eventual ban. Play nice here, folks. I shouldn't have to keep banging this drum, but I will.
    I agree that it's a commission. But I also agree that calling it a tax is a distinction without a difference beyond semantics. You'd think Epic had no case, since all wholesale distributors charge more than they pay for their products and services. But say if an Apple VAR (value added reseller) buys a Macbook Pro from an Apple authorized distributor like Ingram Micro or TechData, that VAR is then able to buy cases, adapters and cables, and other third party accessories without having to pay Apple a commission.

    On Friday, May 20, 2022, Epic games won a rather one-sided condition against Google App Store payment policies. The decision is backed up by years of litigation between Epic Games and the Google App Store. Sounds like precedent to me. This one is going to SCOTUS, and I don't like their chances with this reactionary court.
    chasmwatto_cobrawilliamlondon
  • Reply 7 of 17
    Isn’t this meaningless for Epic? Even if Apple had to allow outside purchases, Epic is still banned from The App Store (AFAIK) due to their breech of contract. It would be kinda funny if Apple lost and other developers started using outside payments, but Epic couldn’t because they’re banned.
    chasmwatto_cobraaderutterwilliamlondon
  • Reply 8 of 17
    chasmchasm Posts: 3,427member
    Apple does not run the App Store and bear the costs of that operation (in the millions of $ per month) out of the goodness of their heart. There is a cost, and that cost is passed on to the developers in the form of 30 percent commission in some cases, 15 percent in some others for paid/subscription/IAP apps. This not only covers (some of, but probably not all of) the cost of running a WORLDWIDE online store, but also subsidizes the free apps (a decision Apple chose to make that influences how much they charge the paid apps).

    Back in the days of boxed software, developers would be lucky to SEE 30 percent of the retail price, after paying for packaging, promotion, distributors, and finally the stores themselves took their cut. Under Apple, they have the option of NONE of those expenses if they choose, and get 70 percent of the selling price. There is not a single item in a single store in the retail world where such a high percentage goes back to the creator.

    As for the statement from someone here that “both sides have sound arguments,” the answer to that is “no, they don’t.” That’s not just my opinion: Epic has only wrangled one minor victory out of 10 charges they leveled against Apple in the original trial, which was reinforced on appeal, and those nine losses are not going to be resurrected by even this extremist SCOTUS because they are literally not considering them; they are only considering the anti-steering provisions. Those other nine claims Epic made have been seen as either factually incorrect or just bullshit by every court that has looked at them.
    Bart Yronnzeus423aderutterwilliamlondonwatto_cobra
  • Reply 9 of 17
    jeffharrisjeffharris Posts: 805member
    Ok, so what does “steering” mean in this context. That’s a term I’ve not heard before.

    Ideally, when using jargon or acronyms, the writer defines it, then is able to use it throughout the article, knowing he/she/it has given the reader some rough understanding of what they’re talking about.
    watto_cobra
  • Reply 10 of 17
    davidwdavidw Posts: 2,081member
    Ok, so what does “steering” mean in this context. That’s a term I’ve not heard before.

    Ideally, when using jargon or acronyms, the writer defines it, then is able to use it throughout the article, knowing he/she/it has given the reader some rough understanding of what they’re talking about.

    With anti-competition laws, "steering" is most often associated with auto insurers. "Steering" is when an auto insurer "steer" their customers to use an auto repair service whom they have a deal with and will give the insurance company a discount on the repair work they bring in. Many States pass "anti-steering" laws that prohibit this and states that the customer have the right to choose any auto repair service they want to use, providing the cost is with-in range of the estimated cost to repair the damage. 

    So what Epic wants to do is to "steer" their customers to pay for their Fortnite Bucks on their website, where they don't have to pay Apple a commission. But Apple App Store  have an "anti-steering" policy where they are not allowed to do this using their iOS app. But Epic did it anyway, by providing a link in their iOS app that "steered" their customers to their website, when it came time to pay for their Fortnite Bucks. This was what got Epic banned from the Apple App Store. (They also did this on the Google Play Store and got banned from there too.)

    So what Judge rule was that Apple "anti-steering" policy was a violation of CA Unfair Competition Law (UCL) and Apple must allow Epic to inform their customers with-in the app, that they could get a discount if they were to pay using the Epic website. The Judge ruled that it was "unfair" for the consumers to not be informed about being able to pay less. Not that it was "unfair" for Epic to not be able to inform their customers or that the policy was anti-competitive. The ruling did not however state that Apple had to allow Epic to provide a direct link to their website.

    Apple main complaint is that the Federal Judge was forcing Apple to change their "anti-steering" policy nationwide, based on the policy only violating a CA law.

    BTW- The SCOTUS had already made a ruling on another company's"anti-steering" policy. That of American Express and American Express won.


     

    edited July 2023 Bart Yronnwatto_cobra
  • Reply 11 of 17
    jayweissjayweiss Posts: 74member
    Epic doesn’t care about its customers. It only cares about the money it can make by redirecting them to its website. 

    Fortnite on iOS only represented 7% of Epic’s revenue and they were willing in give that up to screw over Apple. If they cared about their customers then they would have negotiated a deal with Apple for a lower percentage. Apple even implied that such a deal might have been possible. 

    zeus423aderutterwatto_cobrawilliamlondon
  • Reply 12 of 17
    davidwdavidw Posts: 2,081member
    mayfly said:
    Semantics will be the death of humanity.

    I'll offer this: Apple's 30% charge is a commission. However, some people refer to it as a tax as a way to slight the idea of the payment as being unjustified.

    Yes, tax has a literal meaning, and Apple isn't a government. But sometimes, colloquialisms will win out.

    And the title doesn't say Apple is appealing a Supreme Court ruling. It says Apple is appealing the Supreme Court, which in this context means making a request -- if you want to be semantic about it.

    Remember, feel free to discuss the topic, but don't criticize how we cover the topic, titles, or even typos in forums. It tends to derail conversations. If you have concerns about what we've covered or the titles we use, email us.

    It's in the Forum rules. Don't make us smack you with a rule violation or eventual ban. Play nice here, folks. I shouldn't have to keep banging this drum, but I will.
    I agree that it's a commission. But I also agree that calling it a tax is a distinction without a difference beyond semantics. You'd think Epic had no case, since all wholesale distributors charge more than they pay for their products and services. But say if an Apple VAR (value added reseller) buys a Macbook Pro from an Apple authorized distributor like Ingram Micro or TechData, that VAR is then able to buy cases, adapters and cables, and other third party accessories without having to pay Apple a commission.

    On Friday, May 20, 2022, Epic games won a rather one-sided condition against Google App Store payment policies. The decision is backed up by years of litigation between Epic Games and the Google App Store. Sounds like precedent to me. This one is going to SCOTUS, and I don't like their chances with this reactionary court.


    Epic haven't won crap. All Epic got was an injunction that prevented Google from removing the BandCamp app from the Google Play Store, even though Epic was violating Google Play Store policy by providing a payment link that bypassed paying Google their commission, until the case goes to trial. It's schedule for Nov. 2023. So how can this ...."sound like a precedent" ..... when the case haven't even gone to trial yet? Get your hearing check.

    How is this a "win" if Epic has to keep 10% of the IAP revenue in escrow until the case is settled. It's only 10% commission because Google was willing to offer this to Epic but Epic claimed that that was still too much. Don't forget, when Epic lost against Apple, Epic had to pay Apple $6M in back commission on the revenue they made when they provided a direct link to their own payment site in their Fortnite app (before they got banned.).

    If anything, Epic have a much weaker case against Google, than they had against Apple. With Android, Epic is not required to use the Google Play Store to have an app on Android devices. There are other app stores, they could have their own app store and they could have it side loaded. There is no "monopoly" angle to cry about. Plus Google offered to lower the commission to 10% (in the case with BandCamp). But Epic claim that that was still too much to pay to be in the Google Play Store. And this is the same Epic Games that at first made Fortnite only available by sideloading and then later put it in the Google Play Store. And when in the Google Play Store, Fortnite produce much more profit for Epic than when it was only available by sideloading, even though they had to pay Google a 30% commission.

    Remember, so far none of the court cases against Apple and Google app stores have ruled that Apple and Google are not entitled to a commission. No matter how the customer chooses to pay. Epic wants to pay 0, regardless of how the customer pays. 

    muthuk_vanalingamaderutterwatto_cobra
  • Reply 13 of 17
    mayflymayfly Posts: 385member
    davidw said:
    mayfly said:
    Semantics will be the death of humanity.

    I'll offer this: Apple's 30% charge is a commission. However, some people refer to it as a tax as a way to slight the idea of the payment as being unjustified.

    Yes, tax has a literal meaning, and Apple isn't a government. But sometimes, colloquialisms will win out.

    And the title doesn't say Apple is appealing a Supreme Court ruling. It says Apple is appealing the Supreme Court, which in this context means making a request -- if you want to be semantic about it.

    Remember, feel free to discuss the topic, but don't criticize how we cover the topic, titles, or even typos in forums. It tends to derail conversations. If you have concerns about what we've covered or the titles we use, email us.

    It's in the Forum rules. Don't make us smack you with a rule violation or eventual ban. Play nice here, folks. I shouldn't have to keep banging this drum, but I will.
    I agree that it's a commission. But I also agree that calling it a tax is a distinction without a difference beyond semantics. You'd think Epic had no case, since all wholesale distributors charge more than they pay for their products and services. But say if an Apple VAR (value added reseller) buys a Macbook Pro from an Apple authorized distributor like Ingram Micro or TechData, that VAR is then able to buy cases, adapters and cables, and other third party accessories without having to pay Apple a commission.

    On Friday, May 20, 2022, Epic games won a rather one-sided condition against Google App Store payment policies. The decision is backed up by years of litigation between Epic Games and the Google App Store. Sounds like precedent to me. This one is going to SCOTUS, and I don't like their chances with this reactionary court.


    Epic haven't won crap. All Epic got was an injunction that prevented Google from removing the BandCamp app from the Google Play Store, even though Epic was violating Google Play Store policy by providing a payment link that bypassed paying Google their commission, until the case goes to trial. It's schedule for Nov. 2023. So how can this ...."sound like a precedent" ..... when the case haven't even gone to trial yet? Get your hearing check.

    How is this a "win" if Epic has to keep 10% of the IAP revenue in escrow until the case is settled. It's only 10% commission because Google was willing to offer this to Epic but Epic claimed that that was still too much. Don't forget, when Epic lost against Apple, Epic had to pay Apple $6M in back commission on the revenue they made when they provided a direct link to their own payment site in their Fortnite app (before they got banned.).

    If anything, Epic have a much weaker case against Google, than they had against Apple. With Android, Epic is not required to use the Google Play Store to have an app on Android devices. There are other app stores, they could have their own app store and they could have it side loaded. There is no "monopoly" angle to cry about. Plus Google offered to lower the commission to 10% (in the case with BandCamp). But Epic claim that that was still too much to pay to be in the Google Play Store. And this is the same Epic Games that at first made Fortnite only available by sideloading and then later put it in the Google Play Store. And when in the Google Play Store, Fortnite produce much more profit for Epic than when it was only available by sideloading, even though they had to pay Google a 30% commission.

    Remember, so far none of the court cases against Apple and Google app stores have ruled that Apple and Google are not entitled to a commission. No matter how the customer chooses to pay. Epic wants to pay 0, regardless of how the customer pays. 

    "Brevity is the soul of wit."— William Shakespeare, Hamlet
    Your opinion, and it is just that, will not be considered when the case of Apple Inc. v Epic Games arrives on this "Atlas Shrugged" Supreme Court docket. Until that day, our speculations are moot.
    williamlondon
  • Reply 14 of 17
    thttht Posts: 5,550member
    Ok, so what does “steering” mean in this context. That’s a term I’ve not heard before.

    Ideally, when using jargon or acronyms, the writer defines it, then is able to use it throughout the article, knowing he/she/it has given the reader some rough understanding of what they’re talking about.
    It's a typical retail policy wherein products in a store are not allowed to advertise that they can be bought elsewhere outside of the store. Iow, steering the customer out of one retail store to another. Eg, you go shopping for a LG washing machine at Best Buy. LG isn't allowed to put up a sign inside Best Buy that the washing machine could be bought at LG's web store.

    For Apple Store apps that sell digital goods, those apps are not allowed to state that they can buy their digital goods elsewhere. The app owners have many other ways to tell their users of where to buy their digital goods, just not inside their apps.
    watto_cobra
  • Reply 15 of 17
    Stop calling it a tax. You’re perpetuating the propaganda. It’s simply a fee. 
    aderutterwilliamlondonronnwatto_cobraAppleZulu
  • Reply 16 of 17
    gatorguygatorguy Posts: 24,388member
    chasm said:
    Apple does not run the App Store and bear the costs of that operation (in the millions of $ per month) out of the goodness of their heart. There is a cost, and that cost is passed on to the developers in the form of 30 percent commission in some cases, 15 percent in some others for paid/subscription/IAP apps. This not only covers (some of, but probably not all of) the cost of running a WORLDWIDE online store...
    In 2023, App Store net revenue will reach $4 billion in Asia and $2.5 billion in North America. That doesn't include Europe, Middle East, South America, and other regions. So for giggle round off total AppStore revenues at $8Billion. You still would assume Apple is taking a loss on the AppStore?

    You seem not to be aware that Apple themselves state their total services margin came in at 70%+ last year. That profit is despite other service segment businesses expected to lose money for the foreseeable future like Apple TV+ and AppleMusic. 
    edited July 2023 muthuk_vanalingam
  • Reply 17 of 17
    chadbagchadbag Posts: 2,015member
    BiCC said:
    zeus423 said:
    “Apple's App Store tax has been a hot button issue for quite some time…”

    Not everyone agrees that it is a “tax.” Can I sell goods on eBay without paying a fee? It’s simply the cost of doing business. If companies don’t like it, build the fee into the price. 

    You just broke your own argument. "Build the Fee into the price" - that's called TAX.  Put it on the Price Tag like Euro Trash or put it on the Receipt Canadian and American Style.  It's still a Tax. 
    Huh?   So the cost of paying your employees, paying to keep the lights in you store, or the cost of your store lease is a tax?  Those are all costs of doing business, just as the Apple App Store fee and are not a tax.  Taxes come from governments and Apple is (not yet) a government.   You’re normally PRICE your product to cover its acquisition costs as well as the costs related to sell it plus your profit margins. Just as was suggested.  That is not a tax, even in some sort of expanded definition of tax.   It’s a normal cost of sales. 
    ronnwatto_cobra
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