The US Supreme Court has ended the legal battle between Apple and Epic, for now at least, by refusing to hear either side’s appeals in their long-running dispute over iOS store policies (as reported by Reuters).
Apple had appealed against a lower court’s ruling which ordered certain changes to iOS policies, while Epic had appealed against the same court’s ruling that iOS policies around distribution and monetisation were not in violation of federal antitrust laws. The Supreme Court justices gave no reason for their decision to deny both appeals.
“The court battle to open iOS to competing stores and payments is lost in the United States,” said Epic CEO Tim Sweeney. “A sad outcome for all developers.
“Now the District Court’s injunction against Apple’s anti-steering rule is in effect, and developers can include in their apps “buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP”.”
While Epic may have lost the war, the ruling about Apple’s anti-steering rule was the one battle it did win: Apple has to let app developers direct users to non-iOS means of paying for content. The company has to comply with the court’s ruling but, in an unsurprising turn of events, has chosen to go the route of malicious compliance: Apps can now direct users outside of the iOS payment ecosystem but, drum roll please, Apple is still demanding a 27% cut of any purchases. In its own words:
“Apple’s commission will be 27% on proceeds you earn from sales (“transactions”) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app.”
Yes, that does kind of make it pointless. And guess who’s fuming. “Apple filed a bad-faith ‘compliance’ plan for the District Court’s injunction,” said Sweeney. “It totally undermines the order.”
Sweeney lists various issues with Apple’s intended plan. He calls the 27% commission on web purchases an “Apple tax” that “kills price competition”, and says Apple’s made the process deliberately isolated from the usual “payment flow” on iOS. This means users have to log in to a separate browser session and “search all over again for the digital item they wanted to buy”. The system as-is also serves up a warning to users that Sweeney calls a “scare screen”.
You’ll never guess where this is going. Yep, the man with lots of lawyers is not going to take this lying down. “Epic will contest Apple’s bad-faith compliance plan in District Court,” ends Sweeney. Apple has made no comment on the ruling, nor has its CEO Tim Cook.
It’s been a long old road to get here. Epic first filed an antitrust lawsuit in 2020 that accused Apple of operating an illegal monopoly by forcing iPhone users to install all apps and make all purchases through its App Store (with a typical 30% commission). When it reached court in 2021, the central antitrust accusations were rejected, but the judge did find that Apple was in breach of competition law in its refusal to let developers direct users to alternative payment systems that bypassed Apple’s own. Epic’s argument is basically that, if developers can do this, that opens the door to more competition, lower prices, and a net gain for consumers.
This ruling went through the US Circuit Court of Appeals in San Francisco last year, and was mostly upheld, which led to more appeals, which has led to the Supreme Court basically saying we’re done here.
As far as this lawsuit goes, we are. But this is only about the US. A new European Union law that comes into effect in March will force Apple to allow downloads from outside the App Store, while the EU is also currently engaged in an antitrust case against Apple (again, the main focus being that developers can’t direct users to other payment methods). Clearly the war of the Tims will wage for some time yet.
