Apple yesterday announced a change to its App Store rules in the US after the country's Supreme Court declined to consider its dispute with Fortnite maker Epic over in-app payments. However, Epic argues that the change being made constitutes "bad-faith compliance" with an earlier court order.
The gaming company's CEO, Tim Sweeney, wrote on Twitter that Apple's rule change "totally undermines” the earlier injunction, which was issued in 2021, and as a result, "Epic will contest Apple's bad-faith compliance plan in district court".
Epic, like Spotify, has long criticised Apple's rules regarding in-app payments on iOS devices. Those rules mean that, with some apps, the app maker is obliged to use Apple's transactions platform to take in-app payments, which charges a 15-30% commission. It is also not allowed to sign-post alternative payment options, such as on the app maker's own website.
For companies like Spotify, being unable to take in-app payments without paying commissions to Apple and Google makes it harder to sell premium subscriptions. And, more importantly, it restricts their ability to add more pay-as-you-go features, which is important for Spotify's ambitions in the audiobook space, and for the development of any in-app superfan experiences.
There has been plenty of litigation and lobbying by app makers like Epic and Spotify seeking to force Apple to change its rules, on the basis they are anti-competitive. Epic sued Apple through the courts in California. Judge Yvonne Gonzalez Rogers mainly sided with Apple, concluding that the tech giant's rules were compliant with US competition law.
However, she also concluded that the rule stopping the sign-posting of other payment options - often called the anti-steering rule - was a violation of Californian law. As a result she issued an order stating that that rule should be abolished.
Both Epic and Apple took the dispute to appeal, ultimately to the US Supreme Court, which yesterday formally declined to consider the case. That development means the judgement that Apple's rules are compliant with US law stays in place, but so does the order to allow all app makers to sign-post alternative payment options.
As a result, Apple announced changes to its rules yesterday, confirming that - in the US - the sign-posting of alternative payment options within iOS apps is now allowed. Except, that concession comes with some restrictions. And, most importantly of all, Apple wants to charge a 12% to 27% commission on any purchases that result from people linking to a website from an iOS app.
Continues Sweeney: "Apple has introduced an anticompetitive new 27% tax on web purchases. Apple has never done this before and it kills price competition. Developers can't offer digital items more cheaply on the web after paying a third-party payment processor 3-6% and paying this new 27% Apple tax".
Given Sweeney’s pledge to contest this new “Apple tax”, we can expect a new round of litigation between Epic and Apple.
Despite Apple's moves to mitigate the impact of the Californian court order, the tech giant is slowly relaxing its rules around in-app payments around the world as a result of regulator intervention, legal action and political pressure. As is Google, which enforces similar if slightly less draconian rules on in-app purchases on Android devices.