Court Upholds Ruling Against Apple, Epic Games Gains Ground in App Store Battle

Apple Inc. faced another setback in its ongoing legal battle with Epic Games as the U.S. Court of Appeals recently rejected Apple's request to suspend a mandate requiring changes to its App Store policies. This decision compels Apple to allow developers to guide users to make payments outside of the App Store, bypassing Apple’s commissions.

The federal appeals court in San Francisco made this decision on Wednesday, reinforcing a previous ruling from April that found Apple guilty of anticompetitive practices under California law. This ruling is part of a protracted dispute with Epic Games, developers of Fortnite, regarding Apple's dominance in the smartphone software marketplace.

Apple had sought a stay on the mandate to allow time for an appeal against the April ruling, which enforces compliance with a 2021 injunction. This injunction demanded Apple to cease practices violating state law, specifically those controlling external payment links and restricting developers from utilizing their preferred language and design for guiding users to third-party sites for purchases.

In its decision, the appeals court explained, "Upon reviewing the relevant factors, we find that a stay of enforcement is not warranted." Apple expressed disappointment at the court’s refusal to delay the implementation of the order, stating that it will persist with its defense during the appeals process.

An Apple spokesperson remarked, "We are disheartened by the decision and will continue to argue our case as we pursue an appeal. As previously stated, we strongly disagree with the district court's opinions. Our goal is to ensure the App Store remains a valuable opportunity for developers and a safe and reliable experience for users."

The ruling from April has significant implications for Apple's financial dynamics, curtailing the revenue that the company can generate from external transactions related to the App Store. It also prohibits Apple from imposing commissions on transactions completed outside the App Store and controlling the presentation and content developers use to direct users to alternative payment options.

Apple argued to the appeals court that Judge Yvonne Gonzalez Rogers's decision was "severe and irreparable" in its impact, describing the initial ruling as extraordinary for its free provision requirements. The company insisted that fees should be applicable to transactions initiated through external links, although this practice is now forbidden.

The legal battle roots back to a 2020 dispute when Epic Games challenged Apple's App Store policies, leading to legal interventions requiring Apple to modify its approach effectively. Although Apple conceded to these demands, it simultaneously imposed fees ranging from 12% to 27% for developers opting to direct users through external transactions and maintained strict guidelines on link presentation.

This legal conflict continues to evolve as the court's recent decision further validates Epic Games' stance and signals possible criminal implications for Apple's lack of adherence to previous rulings. The court has forwarded the case for potential contempt charges against Apple.