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Apple and Epic back in court in App Store rules dispute

By Chris Cooke | Published on Tuesday 15 November 2022

Apple and Epic Games were both back in court in California yesterday over their dispute in relation to the former’s App Store rules.

Fortnite maker Epic sued Apple in 2020 arguing that the tech giant’s App Store rules are anti-competitive. The main rules that Epic – like many app makers, including Spotify – don’t like are those that say that all in-app payments on iOS devices must be processed via Apple’s commission charging transactions system, and that no other payment platforms elsewhere on the internet can be sign-posted within an app.

Epic, Spotify and others have hit out at those rules – and the similar if slightly less draconian rules on Google’s Android platform – in multiple countries. Spotify has mainly sent its lobbyists out to call for law-makers to force Apple and Google to change their respective app store rule books, while Epic has gone the litigation route in multiple courts.

The legal battle in California has got by far the most attention. The judge hearing that case, Yvonne Gonzalez Rogers, last year basically sided with Apple, concluding that its App Store rules did not really violate US competition law. However, she did order Apple to allow app makers to sign-post alternative payment options outside of an app, which means getting rid of its current ‘anti-steering’ rule.

Following that ruling, Epic launched an appeal in the Ninth Circuit appeals court, while Apple is appealing the decision around the ‘anti-steering’ provision, having got the judge’s order regarding that specific rule put on hold.

Ninth Circuit judges yesterday heard arguments from both sides, as well as the US Department Of Justice. The legal rep for Epic urged the appeal judges to overturn the lower court ruling, reckoning that the majority of Gonzalez Rogers’ decision outlined the anti-competitive effect of Apple’s App Store rules, but then concluded they didn’t violate competition law.

Meanwhile, Apple’s lawyer insisted that Gonzalez Rogers got it right, adding that the tech firm’s rules around payments were primarily to protect consumers, and the profits from those transactions allowed it to develop its App Store platform and monitor the apps sold via it. And, perhaps more importantly, he also argued that during last year’s court hearing Epic had failed to prove anti-competitive conduct.

According to Reuters, at least one of the Ninth Circuit judges, Milan Smith, seemed to share Apple’s viewpoint regarding Epic’s arguments in the original hearing. He told Epic’s attorney: “The one thing that really troubles me is this failure of proof. Looking at the record, it seems [Apple’s lawyers] have made a good case”.

However, he also conceded that there were some inconsistencies in the original ruling. According to Law360, he also noted that “I like Judge Rogers a lot, but she’s inconsistent – it’s hard to make it square, so what do we do with that?”

Lawyers for both sides aren’t expecting a ruling from the appeals court for at least another nine months. Meanwhile, litigation and lobbying on Apple and Google’s app store rules continues elsewhere. And while Apple has generally been the winner in this particular litigation, it does feel like the pressure is increasingly on both tech giants to relax these rules to some extent.

With that in mind, Google is piloting a scheme to allow some app makers to include their own payment options within their Android apps alongside the Google option. Spotify is the first company involved in that pilot, and it started slowly rolling out so called User Choice Billing on its Android app last week.