Judge scolds Apple's lawyers over appeals arguments
A US judge has chided Apple's legal arguments as the company asks for time to appeal an App Store antitrust case, but has granted the delay.
Apple won the lawsuit brought against it by "Fortnite" developer Epic Games, but it didn't win outright. There were some elements of the ruling that required Apple to make changes in its App Store rules, and the company has previously asked for a stay on a number of those.
Specifically, Apple doesn't want to follow the instruction that would see it having to allow apps to link out to alternative payment options. The 9th Circuit upheld the ruling in April, but Apple is now preparing to ask the Supreme Court to strike it down.
According to Reuters, the appeals court has now granted Apple 90 days to file its petition, and in the meantime has paused the ruling. However, Judge Milan Smith wrote in the ruling that the delay is allowed because of "our general practice of granting a motion for a stay if the arguments presented therein are not frivolous."
"I write separately to express my view that, while the arguments in Apple's motion may not be technically frivolous," wrote Judge Smith, "they ignore key aspects of the panel's reasoning and key factual findings by the district court."
"When our reasoning and the district court's findings are considered," continued the ruling, "Apple's arguments cannot withstand even the slightest scrutiny."
"Apple's standing and scope-of-the-injunction arguments simply masquerade its disagreement with the district court's findings and objection to state-law liability as contentions of legal error," said Judge Smith.
Sadly, Apple's anti-steering rules - which both the District Court and the 9th Circuit Court found to be illegal - will remain in place, as the 9th Court Court stayed the injunction that puts an end to the practice. Justice delayed, again. https://t.co/I044RIMF9c
-- Tim Sweeney (@TimSweeneyEpic)
Epic Games CEO Tim Sweeney called the decision "Justice delayed, again," on Twitter. As well as starting the lawsuit against Apple, Sweeney has more recently protested that Apple is a "major roadblock in the way of Epic's vision for a metaverse."
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Comments
That isn’t a justice win, it’s a great way for people to get annoyed with your app and go somewhere else.
If I was Apple I’d just let them have that little win. The overwhelming majority of people will still choose Apple’s IAP because it’s more convenient. I know I will.
For one thing, the Appstore isn't Apple's main business. They aren't a retailer like Walmart. They make their money off of the devices they sell. Anything they make from the Appstore is extra income. The apps on the store actually benefit Apple whether they make money for them or not because it makes the experience better for the customer. If there weren't any apps, they wouldn't be selling Iphones or Ipads. That is why they in fact do allow apps on the store that make no money for them. That's what free apps are with no in app purchases. Developers don't have to sell anything like IAP's or ads to get their apps on the Apple's devices. They just have to pay for a developer account, yearly. They don't kick apps off the Appstore if they don't sell, like Walmart would if a product didn't sell, because the app being there helps them anyway by adding to the variety of the customer experience.
For another thing, retail products do sometimes have website links to buy items directly from them. One example I found is Cuisinart, the kitchen appliance brand. On the box it says, "Discover the complete line of Cuisinart brand premier kitchen appliances including full-size food processors, blenders, icemakers, coffemakers, and toaster ovens at www.cuisinart.com." That means that the customer can choose to buy it online instead of from the retailer, and they are informed of this since it's advertised on the box. Granted, it doesn't mean that you can buy the one in the store and take it home with you by paying from a QR code instead of at the register, but that isn't what the judges are saying to allow when it comes to Apple.
Epic really wants to have an in app payment that goes directly to them (what they got kicked off the Appstore for), which does match your analogy with a QR code, but that isn't the same as having a link to something else outside of the app.
By linking an exterior payment, you have to go to another store from a browser in order to buy it, which is more inconvenient than just doing it in game, since you already are there. That's the same thing with Walmart. You can't buy
That's the incentive for people to buy products still via Apple or via Walmart, instead of going out of the game or store, and to another website where they have to deal with something else, instead of just clicking the Apple pay with their fingerprint or bringing the item to the register.
Apple is already allowing Netflix and other so called 'reader apps' to do what the judges are trying to mandate, because it was drawing too much attention to their 'monopolistic' policies by customers who didn't understand why they couldn't sign up through Netflix themselves in the app, and pay subscriptions to them, but were only allowed to do it through Apple.
Epic has always been free to advertise, save for in-app, that people can buy V-bucks from any number of places. Web ads, Youtube sponsorships, billboards, commercials, etc. They could have avoided paying Apple for in-app fees by getting people to buy V-bucks on their website. This was unsatisfactory because the impulse buyers are a big chunk of revenue (well, on game consoles it is), and they really wanted all the money from impulse buyers.
Epic sacrificed 7% of their Fortnite revenue in suing Apple. Apple's fees constituted 2% of Fortnite revenue. I'm still confused as to why they did it. It really served no purpose, even if they were successful.
At the heart of this is really a question of ownership of a platform and when it becomes a utility, which notionally allows a gov't to impose rules on that platform. If a platform is small, nobody gives much attention if it has draconian rules to put apps on that platform. You can play games on Tesla's app platform. Is any court going to force Tesla to open it up so that 3rd parties can put their own app stores on it? The answer is obviously no. Nintendo Switch? Valve Steamdeck? Well, under what situations would it? Why?
If the court produces a non-status quo decision regarding this, the logic they are going use is just going to be crazy. The testimony from economics and business experts are all going to be suspect. That's if the judges and court actually follow expert testimony.
Regarding reader apps. It's been what, 11 years? Netflix, Amazon, services with a subscription, did not have fees imposed on them if customers signed up outside of its iOS app. They were prevented from advertising as such in the app, but were free to advertise anywhere else to get customers to sign up thru their website. The only new thing in the recent past is that gov'ts are forcing Apple to let 3rd parties advertise it in-app. It will be interesting see what the consequences of this are. If it is being unable cancel subscriptions and getting spam, well, wrong decision from my point of view.