Apple has lost its request to pause a court order requiring it to allow App Store developers to direct users to purchase in-app items on the web without paying the notorious “Apple tax.” The tech giant is on a losing streak in court related to its stranglehold over app developers including Epic Games, the developer of Fortnite.
Bloomberg reports that in a significant setback for Apple, a San Francisco-based federal appeals court denied the company’s request to pause a court order that would force it to make changes to its App Store policies. The ruling, issued on Wednesday, is the latest development in the long-running legal battle between Apple and Epic Games, the maker of the popular game Fortnite, over the dominance of the smartphone software market.
The court order in question, issued by U.S. District Judge Yvonne Gonzalez Rogers in April, found that Apple had engaged in anticompetitive conduct in violation of California law. As a result, the company was ordered to comply with a 2021 injunction that required it to allow developers to bypass the App Store’s in-app payment system and avoid paying “Apple tax” commissions of up to 30 percent to the iPhone giant.
In its request to pause the court order, Apple argued that the ruling was causing the company “grave irreparable harm.” The company also contended that Judge Gonzalez Rogers had erred in concluding that it did not comply with her 2021 injunction. However, the appeals court was not persuaded by Apple’s arguments, stating in a brief two-page opinion that the company had not met the burden of showing that the circumstances justified a stay of the order.
The ruling is expected to have significant implications for Apple’s App Store business model, which has been a lucrative source of revenue for the company. Several prominent developers, including Epic, Amazon, and Spotify, have already modified their apps to allow customers to circumvent Apple’s payment methods and avoid paying commissions.
Apple expressed disappointment with the ruling, with a spokesperson stating, “We’ll continue to argue our case during the appeals process. As we’ve said before, we strongly disagree with the district court’s opinion. Our goal is to ensure the App Store remains an incredible opportunity for developers and a safe and trusted experience for our users.”
On the other hand, Epic’s CEO, Tim Sweeney, celebrated the ruling on social media, declaring it the end of the “long national nightmare of the Apple tax.” He also expressed hope that the upcoming Apple Worldwide Developers Conference (WWDC) would be a “celebration of freedom that developers and users have long deserved.”
The legal battle between Apple and Epic began in 2021, when Judge Gonzalez Rogers largely sided with Apple, stating that the company’s App Store policies did not violate federal antitrust law. However, she did order Apple to allow developers to direct users to external websites to complete transactions for in-app purchases. The ruling was ultimately upheld by the U.S. Supreme Court last year when it declined to hear appeals in the case.
Following the 2021 injunction, Apple made some changes to its policies, allowing developers to point users to the web to complete transactions, but still required them to pay a 27 percent commission on any revenue generated. Epic and other developers complained about the new commission rate and the restrictions Apple placed on their ability to link out of the App Store, including the design and placement of buttons. This led to the April ruling, in which Judge Gonzalez Rogers concluded that Apple had “willfully” violated her 2021 injunction and referred the company to federal prosecutors for a possible criminal probe of contempt of court.
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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