U.S. Supreme Court temporarily allows Apple to keep App Store payment rules

Aug 10, 2023

The U.S. Supreme Court has allowed Apple to keep its App Store payment rules, temporarily. This is yet another loss for Epic Games in its lawsuit against the Cupertino company.

In its long-standing antitrust feud with Apple which began in 2020, when the company booted off Fortnite from the App Store for using a third-party payment system, Epic Games had seen a small victory in April this year. The 9th US Circuit Court of Appeals upheld a federal court order (from 2021) that would force Apple to allow third party payment options in its App Store. The company had been found guilty of violating the state's Unfair Competition Laws for restricting developers to its own in-app payment system, and not allowing developers to use other payment gateways in their apps. The court had ordered Apple to change its anti-steering App Store rules to allow developers to include links and buttons in their apps to other payment gateways.

This meant that Apple had to permit other payments across all states in the U.S., and not just in California, The company called the decision unfair, and even questioned the power of judges. However, Epic's joy was short-lived, as Apple appealed against the injunction, and it was stayed by the San Francisco-based Ninth Circuit Court of Appeals in July 2023. Epic was naturally displeased with the delay, and chose to appeal against it. The company's founder, Tim Sweeney, had remarked that justice had been delayed again.

Apple in turn had claimed that the injunction would put its users in harm's way, as it would be unable to protect users from fraud, scams, malware, spyware, and objectionable content that could be hosted on third-party payment servers. The company would also need to change its business model before the judicial review has been completed.  Judge Milan D. Smith Jr., of the Ninth Circuit Court, had criticized Apple's attitude for choosing to ignore the reasoning, and factual findings by the panel, and pointed out that the company's arguments were not strong to withstand a scrutiny.

U.S. Supreme Court allows Apple to keep App Store payment rules temporarily

Epic Games appealed against the stay that allowed Apple to continue with its current App Store rules, asking the U.S. Supreme Court to vacate it, to ensure app developers would not be impacted by the restrictions for a long time.

Reuters reports that Liberal Justice Elena Kagan of the U.S. Supreme Court denied Epic Games' request to remove the stay against the injunction that was issued by the 9th U.S. Circuit Court of Appeals. In other words, Apple can continue to keep its App Store payment rules, i.e. act as the sole controller of the payment system. While this is a blow to Epic Games (and other app developers), the win is only a temporary one for Apple, as it is only valid until the Supreme Court hears the plea, and comes to a decision on the matter. That could take a long time, which might explain why Epic seems to be frustrated with the delays, it said that the 9th Circuit was being "far too lenient" for putting cases on hold.

Apple is likely to allow installation of apps from third-party stores and sources in iOS 17, to comply with EU's Digital Markets Act. Sideloading may only be available for users in Europe, but combined with the injunction to let other payment methods, it could be a very important step in the fight against the limitations in iOS and the App Store.

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U.S. Supreme Court temporarily allows Apple to keep App Store payment rules
The U.S. Supreme Court has allowed Apple to continue with its current App Store payment rules, for now.
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  1. Howard Allan Pearce said on August 10, 2023 at 9:37 am

    “The U.S. Supreme Court has allowed Apple to keep its App Store payment rules,”

    I’d like to keep the rules I set for my property too!

    Thank you SCOTUS for protecting the concept of property rights !!!

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