Apple denied request to delay App Store changes resulting from Epic lawsuit

Posted:
in General Discussion edited November 2021
A federal court judge on Tuesday denied Apple's request to stay enforcement of mandated App Store changes resulting from the company's high-profile legal spat with Epic Games.

Fortnite


Following a brief in-court hearing on the matter, U.S. District Judge Yvonne Gonzalez Rogers tossed Apple's motion to stay court orders that would force the company to nix App Store anti-steering rules prohibiting developers from integrating purchase buttons and links within their apps.

The ruling dates back to the conclusion of the Epic v. Apple case. In an attempt to sidestep App Store commissions and launch a pre-planned legal barrage designed to upend App Store policy, Epic last year surreptitiously included a direct payment alternative in its popular game "Fortnite." Apple pulled the game for flouting App Store guidelines, triggering a legal blitz centered on alleged antitrust issues.

Apple prevailed on nine out of 10 counts in the ensuing trial, but Judge Rogers took exception to anti-steering policies that restrict developers from using buttons or links to direct users to alternative payment methods. In handing down her decision in September, the judge called on Apple to eliminate those guidelines and allow app makers to "[communicate] with customers through points of contact obtained voluntarily from customers through account registration within the app."

Apple appealed the ruling and asked the court to stay enforcement of the injunction pending resolution of its action. That motion was denied today.

"In short, Apple's motion is based on a selective reading of this Court's findings and ignores all of the findings which supported the injunction, namely incipient antitrust conduct including supercompetitive commission rates resulting in extraordinarily high operating margins and which have not been correlated to the value of its intellectual property," Judge Rogers writes.

Apple's legal team argued in court today that integrating new App Store affordances is a monumental task that would take "months" to accomplish.

"This will be the first time Apple has ever allowed live links in an app for digital content. It's going to take months to figure out the engineering, economic, business, and other issues," said Apple attorney Mark Perry, according to an in-court report from The Verge. "It is exceedingly complicated. There have to be guardrails and guidelines to protect children, to protect developers, to protect consumers, to protect Apple. And they have to be written into guidelines that can be explained and enforced and applied."

The company held up settlement terms in an unrelated class-action lawsuit as evidence of compliance. In August, Apple agreed to make changes to App Store policy that would allow developers to contact customers via email about alternative payment methods. The settlement, which includes provisions for a $100 million fund for small developers, is reportedly headed for approval.

Judge Rogers remained skeptical of Apple's ask in the Epic case because the company gave no definitive timeline for completion, The Verge reports.

"You haven't asked for additional time. You've asked for an injunction which would effectively take years," Judge Rogers said. "You asked for an across-the-board stay which could take three, four, five years."

She reiterates the point in her written judgment.

"That the injunction may require additional engineering or guidelines is not evidence of irreparable injury. Rather, at best, it only suggests that more time is needed to comply," the decision reads. "Apple, though, did not request additional time to comply. It wants an open-ended stay with no requirement that it make any effort to comply. Time is not irreparable injury."

Apple has until Dec. 9 to make the ordered App Store changes, but the company plans to appeal today's ruling.

"Apple believes no additional business changes should be required to take effect until all appeals in this case are resolved. We intend to ask the Ninth Circuit for a stay based on these circumstances," a company spokesperson told the publication.



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Comments

  • Reply 1 of 25
    z3r0z3r0 Posts: 238member
    So they are basically saying that if I want to sell my product in a brick and mortar store I as the supplier can impose on the merchant/store owner what POS system they must use and what forms of payments they must accept in addition to what they already have. ;) 

    Beatsmaximarawatto_cobra
  • Reply 2 of 25
    slurpyslurpy Posts: 5,331member
    This judge seems like a moron. 
    williamlondonBeatswatto_cobra
  • Reply 3 of 25
    danoxdanox Posts: 725member
    Epic should not be back in the store, sometimes you just cut the cord and move on like flash…
    edited November 2021 mejsricbloggerblogbaconstangBeatswatto_cobra
  • Reply 4 of 25
    The funny thing is this provides no benefit to Epic. They’re still not allowed in The App Store due to intentional breach of contract.
    mejsricbloggerblogaderutterwilliamlondonwatto_cobra
  • Reply 5 of 25
    crowleycrowley Posts: 9,349member
    z3r0 said:
    So they are basically saying that if I want to sell my product in a brick and mortar store I as the supplier can impose on the merchant/store owner what POS system they must use and what forms of payments they must accept in addition to what they already have. ;) 
    Nope.  In-App Purchases are not within Apple's store.  They're in the app, the clue is in the name.
    elijahgbala1234shareef777
  • Reply 6 of 25
    crowleycrowley Posts: 9,349member
    slurpy said:
    This judge seems like a moron. 
    Based on?

    Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    muthuk_vanalingamelijahgbala1234
  • Reply 7 of 25
    sdw2001sdw2001 Posts: 17,789member
    crowley said:
    slurpy said:
    This judge seems like a moron. 
    Based on?

    Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    I agree.  They will now have to use other actions to stave off making the changes.  I'm sure this was Plan A.  It's like asking Santa for a new Lexus when you really just need a used Toyota.  Doesn't hurt to ask.  Plan B will be the 9th circuit, and Plan C will likely be going back to the judge to ask for a specific time (if they can do that...I don't know the process). She's practically begging them to do just that. 
    watto_cobra
  • Reply 8 of 25
    Netflix, Spotify, and Amazon (Kindle) already showed that consumers don't need links in an app to be aware that they can pay for something online instead of in the App Store. Those are all very mainstream kinds of apps, so you can't argue that those users are somehow more technically savvy than the typical iPhone user. IMO, the judgement is based on a false premise: that the only way to communicate to an App Store customer is through the app itself AND that the App Store customers are unaware that they can pay for things online without links in the app. 
    aderuttermaximarawatto_cobra
  • Reply 9 of 25
    crowley said: Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    Judge is ignoring that iPhone customers already know how to buy things online (like subscriptions or ebooks/audio books) for use with apps downloaded from the App Store. You can't really make much of an argument that this order requires immediate action when Netflix, Spotify, Amazon rake in big bucks from their iOS apps and customers never pay inside the app or use links inside the app. 
    aderutterBeats
  • Reply 10 of 25
    I haven’t read the order, but obviously this isn’t about links to outside payments inside the app — it’s about how Apple then collects its cut of those payments, which the judge ruled they can collect. So a whole system for doing that has to be put in place. It’s not a small thing — it’s a major change to how Apple collects its share of IAPs. 

    Apple basically has to create a set of requirements that allow them to audit payments originating inside the app. Surely they will require compliance with those requirements for an app to be approved. 

    That said, it’s not exactly rocket science. Apple can do that in a timely manner. So I get the judge’s criticism. But I also think it’s likely the appeal to the higher court will succeed, on the grounds that it will be costly for Apple to implement and then roll back a change like that if they win their appeal. 
    edited November 2021 aderutterbaconstangBeatswatto_cobra
  • Reply 11 of 25
    crowley said: Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    Judge is ignoring that iPhone customers already know how to buy things online (like subscriptions or ebooks/audio books) for use with apps downloaded from the App Store. You can't really make much of an argument that this order requires immediate action when Netflix, Spotify, Amazon rake in big bucks from their iOS apps and customers never pay inside the app or use links inside the app. 
    True, but you’re talking apples and oranges. That’s exactly why the ruling and the order only applies to IAPs inside gaming apps. It’s not about regular subscriptions. It’s about “friction” against impulse, the essential dynamics of gambling. These apps prey on that impulse, and the judge has ruled unequivocally that Apple, having created and maintained the smooth platform these predators use to reduce that friction, is entitled to its cut.
    edited November 2021 aderutter
  • Reply 12 of 25
    crowleycrowley Posts: 9,349member
    crowley said: Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    Judge is ignoring that iPhone customers already know how to buy things online (like subscriptions or ebooks/audio books) for use with apps downloaded from the App Store. You can't really make much of an argument that this order requires immediate action when Netflix, Spotify, Amazon rake in big bucks from their iOS apps and customers never pay inside the app or use links inside the app. 
    If Apple's argument was that it was hard and would take months then why would the judge take anything else into account?  The judgement has already gone against Apple, and it appears that they weren't arguing the conclusion, just asking for a stay with a poor justification.

    So none of this makes the judge a moron.  They seem to have acted entirely appropriately.
  • Reply 13 of 25
    IreneWIreneW Posts: 286member
    slurpy said:
    This judge seems like a moron. 
    That is one opinion. I personally think it sounds like Apple failed to do their homework.
    Note that i don't necessarily believe Apple should be forced to allow third party payments in-app. Just that Apple made a poor case here, considering their "victory" in the larger case.
    muthuk_vanalingamwilliamlondon
  • Reply 14 of 25
    mjtomlinmjtomlin Posts: 2,504member
    A system needs to be put in place where a developer can't charge users willy-nilly. Apple would still want to be able to protect users from such activities and that would require new API's where purchase authorization still has to go through "Apple" somehow. For instance, Apple would not provide payment information to the app until the user authorizes the transaction.
    maximara
  • Reply 15 of 25
    gatorguygatorguy Posts: 23,321member
    mjtomlin said:
    A system needs to be put in place where a developer can't charge users willy-nilly. Apple would still want to be able to protect users from such activities and that would require new API's where purchase authorization still has to go through "Apple" somehow. For instance, Apple would not provide payment information to the app until the user authorizes the transaction.
    Are there controls in place now to prevent app developers from charging whatever they wish as long as not 100% scam? I remember articles not too long ago about some somewhat scammy apps charging high weekly subscriber fees. Others were considered ridiculously priced for what they offered yet continued to be available in the App Store.

    I will agree with you that Apple will have some methodology for tracking purchases if for no reason other than making sure they get their cut. "Protecting customers" won't be the reason.
    muthuk_vanalingam
  • Reply 16 of 25
    crowley said:
    crowley said: Seems very sensible to me.  Apple asked for a multi year delay to a judgement because...?  It's hard and will take a few months to implement?  Not justified at all.  
    Judge is ignoring that iPhone customers already know how to buy things online (like subscriptions or ebooks/audio books) for use with apps downloaded from the App Store. You can't really make much of an argument that this order requires immediate action when Netflix, Spotify, Amazon rake in big bucks from their iOS apps and customers never pay inside the app or use links inside the app. 
    The judgement has already gone against Apple, and it appears that they weren't arguing the conclusion, just asking for a stay with a poor justification.
    My understanding is that Apple is asking for a stay on this particular part of the ruling while appealing it. The justification doesn't seem poor to me considering the lawsuit was not actually filed by customers, but rather a developer that is no longer even in the App Store. Customers can still pay for things via the internet in the interim, and there's quite a bit of proof that method does work. 
    williamlondonwatto_cobra
  • Reply 17 of 25
    z3r0z3r0 Posts: 238member
    So a the supplier has the right to build another brick and mortar store inside the store owners brick and mortar store to sell other products without permission?

    Some logic you have there!

    crowley said:
    z3r0 said:
    So they are basically saying that if I want to sell my product in a brick and mortar store I as the supplier can impose on the merchant/store owner what POS system they must use and what forms of payments they must accept in addition to what they already have. ;) 
    Nope.  In-App Purchases are not within Apple's store.  They're in the app, the clue is in the name.

    williamlondonBeatswatto_cobra
  • Reply 18 of 25
    "In short, Apple's motion is based on a selective reading of this Court's findings and ignores all of the findings which supported the injunction, namely incipient antitrust conduct including supercompetitive commission rates resulting in extraordinarily high operating margins and which have not been correlated to the value of its intellectual property," Judge Rogers writes.

    Yikes.

    Having said that, it sounds like Apple will probably be given a few months to implement this--but this judge isn't giving them a blank check. Apple needs to come back with a detailed plan for implementation and show why it will take X months (where X is a smallish number).
    elijahgwatto_cobra
  • Reply 19 of 25
    crowleycrowley Posts: 9,349member
    z3r0 said:
    So a the supplier has the right to build another brick and mortar store inside the store owners brick and mortar store to sell other products without permission?

    Some logic you have there!

    crowley said:
    z3r0 said:
    So they are basically saying that if I want to sell my product in a brick and mortar store I as the supplier can impose on the merchant/store owner what POS system they must use and what forms of payments they must accept in addition to what they already have. ;) 
    Nope.  In-App Purchases are not within Apple's store.  They're in the app, the clue is in the name.
    Weird reading.  There is no brick and mortar store, these are digital stores.  Apple sell apps.  The app sells in-app content.

    Plenty of actual brick and mortar stores sell things that can be used to buy other things.  Electronics store may sell Macs and iPhones, but have no claim over the purchases made on them.


    edited November 2021 elijahg
  • Reply 20 of 25
    BeatsBeats Posts: 2,704member
    crowley said:
    z3r0 said:
    So a the supplier has the right to build another brick and mortar store inside the store owners brick and mortar store to sell other products without permission?

    Some logic you have there!

    crowley said:
    z3r0 said:
    So they are basically saying that if I want to sell my product in a brick and mortar store I as the supplier can impose on the merchant/store owner what POS system they must use and what forms of payments they must accept in addition to what they already have. ;) 
    Nope.  In-App Purchases are not within Apple's store.  They're in the app, the clue is in the name.
    Weird reading.  There is no brick and mortar store, these are digital stores.  Apple sell apps.  The app sells in-app content.

    Plenty of actual brick and mortar stores sell things that can be used to buy other things.  Electronics store may sell Macs and iPhones, but have no claim over the purchases made on them.



    It’s called an analogy.
    watto_cobra
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