Business News Digital Legal

Epic hits back at Apple’s attempt to postpone App Store rule change regarding alternative payment sign-posting

By Chris Cooke | Published on Tuesday 26 October 2021

Fortnite maker Epic Games has hit back at Apple’s attempt to postpone an injunction issued by a US court that would force the tech giant to allow any company with an iOS app to sign-post alternative payment options.

Apple wants the injunction paused while it appeals the ruling in its wider legal battle with Epic, but says it might introduce voluntary changes to address the court’s concerns in the short term. Epic counters that that appeal could take years, and Apple can’t be trusted to do the right thing on its own.

Epic, like Spotify, has an assortment of gripes about Apple’s App Store rules. Not least the fact that in-app payments can only be taken using Apple’s commission-charging transactions platform, and app makers can’t sign-post alternative payment options elsewhere in the internet.

However, while the streaming music firm has mainly gone the regulatory route in a bid to force Apple to change its rules, the gaming company has gone the litigation route, and in multiple countries. However, its legal battle with Apple in California has got by far the most attention so far.

Both Epic and Spotify argue that Apple’s App Store rules constitute anti-competitive behaviour. But in the Californian court battle, the judge mainly sided with Apple and rejected many of the competition law arguments presented by Epic.

However, one aspect of judge Yvonne Gonzalez Rogers’ ruling did favour the Fortnite firm, and that was the injunction forcing Apple to allow all app makers to sign-post within their apps alternative payment options that exist elsewhere on the net.

Apple had actually already made some concessions in that domain prior to Gonzalez Rogers’ ruling. In order to settle a regulatory investigation in Japan, Apple announced at the start of September that so called reader apps will be able to sign-post alternative payment options from next year.

Those are apps that provide to access digital content like books, podcasts, music and videos that has either been previously purchased or which is accessed via a subscription. So that concession helps Spotify, but it doesn’t help Epic. Therefore, for the gaming outfit, the injunction was a considerable win, even if both Spotify and Epic’s real end game is to be able to use their own transaction systems within their apps.

The injunction is due to go into force in 9 Dec, but with both Apple and Epic now appealing the wider ruling, the former has asked Gonzalez Rogers to stay the injunction pending appeal. Needless to say, Epic is not impressed with that proposal.

In a new legal filing, Epic says that Apple played down the significance of the injunction when it was issued last month but, in its motion to have the ruling stayed, “Apple now claims that the court’s injunction would cause it irreparable harm”.

Epic also notes how “Apple suggests that, during the requested stay, it may voluntarily take unspecified actions, in Apple’s preferred way and on Apple’s preferred schedule, to address (at least in part) the decade-old problem identified by the court”.

“But”, it goes on, “the stay that Apple requests, until ‘the appeals filed by both Epic and Apple have been resolved’, could easily last many years. During that time, there is no reason to expect that Apple will cease its longstanding unfair conduct, the legality of which it continues to vigorously defend. As the court found, ‘nothing other than legal action seems to motivate Apple’ to reconsider its pricing or other restrictions on the App Store”.

With that in mind, Epic argues, “a stay would simply let Apple off the hook, and perpetuate the harms to consumers and developers, for a substantial period of time”.

It remains to be seen how Gonzalez Rogers responds, and whether a wider change to Apple’s sign-posting rule will come into force next month as her court ordered, within the US at least.