While Apple legal battle with Epic Games Inc is being appealed, the iPhone manufacturer failed to persuade a federal judge to postpone a December 9 deadline to change the profitable business model for its App Store. Unless an appeals court grants the iPhone maker a reprieve, it will soon have to allow developers to direct users to payment methods other than the App Store, an upgrade ordered by a judge in September that may cost the tech giant a few billion dollars per year.
Apple has urged US District Judge Yvonne Gonzales Rogers to stay a portion of the injunction requiring the corporation to erase a rule prohibiting developers from using web links or other techniques within apps to alert users about payment options outside the App Store.
In a ruling issued Tuesday, Rogers stated, “Apple’s application is predicated on a selective reading of this court’s findings and ignores all of the findings that supported the injunction.” “There is a basic defect in the motion.”
Apple has announced that it will appeal Gonzales Rogers’ order to a federal appeals court in San Francisco. Apple stated in a statement that “no more business adjustments should be required to take effect until all appeals in this case are decided.”
Epic did not respond to a request for comment on the verdict right away.
While Apple’s battle with Epic was mostly won, the world’s most valuable technology corporation is still vulnerable to challenges to its status as a digital economy gatekeeper.
The iPhone maker is still facing a slew of antitrust lawsuits in the United States and abroad, as well as monopolisation enforcement investigations by federal and state agencies and legislative attempts to limit its business practises.
According to Bloomberg Intelligence, pressure on Apple to drop its App Store developer commissions, which are now as high as 30%, could reduce revenue by $2 billion to $4 billion in the worst-case scenario.
Rogers gave Apple 90 days to amend its regulations prohibiting mobile-app developers from alerting their consumers about payment options on the web outside of the App Store through methods such as emails in her September 10 judgement.
Meanwhile, the creators of the famous Fortnite video game are appealing the parts of Rogers’ ruling that they disagree with. Tim Sweeney, Epic’s CEO, has said that the company’s appeal may take five years to resolve, which could include a trip to the US Supreme Court.
Rogers ruled in Apple’s favour in September, dismissing Epic’s accusations that App Store practises violate federal antitrust law by harming developers and consumers while profiting the tech giant. However, she found that Apple’s so-called anti-steering policy had breached California’s unfair competition rules.
Prior to the verdict, Apple announced two App Store adjustments in settlements with small US developers and the Japan Federal Trade Commission that were comparable to the court’s injunction.
Apple is allowing developers to communicate directly with customers about other payment methods, and it will begin allowing so-called “reader” applications — those that deal with media such as video, photographs, and news — to lead users to the web to subscribe, bypassing Apple’s costs, next year. In a brief last month, the corporation emphasised such modifications, pleading with Rogers to accept its stay request.
4:20-cv-05640, US District Court, Northern District of California, Epic Games Inc v Apple Inc (Oakland).