Apple Loses Bid to Pause App Store Order, Faces Revenue Impact

Apple Inc. has suffered a setback in its long-running dispute with Epic Games over the dominance of its App Store in the smartphone software market. The U.S. Court of Appeals for the Ninth Circuit in San Francisco rejected Apple's request to pause the enforcement of a court order that requires the tech giant to allow App Store developers to guide users to purchase in-app goods on the web, bypassing Apple's commission fees.

The court's decision, made on Wednesday, is the latest in a series of legal battles between Apple and Epic Games, which began in 2020 when Epic sued Apple for antitrust violations. The court order, issued in April, mandates that Apple must comply with a 2021 injunction issued by U.S. District Judge Yvonne Gonzalez Rogers, who found that Apple had engaged in anticompetitive behavior in violation of California law.

Apple had sought to stay the order while it appeals the April decision, arguing that the ruling would cause "serious and irreparable harm" to the company. Apple also contended that Gonzalez Rogers had misinterpreted the 2021 injunction. However, the appeals court, in its opinion, stated that "after reviewing the relevant factors, we find that a stay is not warranted."

In response to the ruling, Apple expressed disappointment and vowed to continue its legal defense. "We will continue to litigate our appeal," an Apple spokesperson said. "As we have said before, we strongly disagree with the district court's decision. Our goal is to ensure that the App Store continues to provide developers with a unique opportunity and users with a safe and reliable experience."

The April ruling significantly impacts Apple's revenue from the App Store, as it prohibits the company from charging commissions on transactions that occur outside of the App Store. It also restricts Apple's control over the language and design of apps that guide users to make payments on the developer's website.

Several developers, including Epic, Amazon, and Spotify, have already modified their apps to allow customers to bypass Apple's payment system. In response to the 2021 injunction, Apple allowed developers to direct users to complete in-app purchases on the web but required a 27% revenue share.

Epic accused Apple of willfully violating the 2021 injunction, leading to the April ruling. Following hearings over the past year and several weeks this year, Gonzalez Rogers concluded that Apple had "willfully" violated her injunction four years ago. She also referred the case to federal prosecutors, who may conduct a criminal investigation into Apple for contempt of court.