Tech groups challenge Apple’s in-app payment policies in Supreme Court review

Anne Freer | November 3, 2023

App Business

Several tech industry organisations, including NetChoice and Chamber of Progress, have expressed their concerns to the Supreme Court regarding the potential consequences for free iOS apps if mobile app developers are compelled to incorporate in-app links to alternative payment platforms.

The case

These organisations are calling on the court to review an injunction that would limit Apple from enforcing its longstanding anti-steering policies. These policies effectively prevent app developers from including in-app links to payment alternatives other than those provided by Apple.

The primary concern is that if Apple cannot enforce these anti-steering rules for in-app purchases, app developers might seek out alternative payment processors that charge lower fees. In doing so, they could effectively bypass Apple’s transaction systems. This could have a ripple effect on the way apps are offered to users.

Should this scenario come to pass, Apple might find itself in a position where it needs to start charging developers for the initial downloads of their apps, which were previously free. This could substantially increase deployment costs for developers, and they may have to make the difficult choice of either discouraging downloads or instituting charges for app downloads.

Ongoing disputes

The enduring dispute between tech giants Apple and Epic Games, which began in 2020, has its roots in Apple’s stringent policies surrounding in-app purchases. Central to the conflict was Apple’s insistence that developers exclusively utilise its payment platform, coupled with a substantial commission of up to 30% on such transactions.

In 2021, Apple made a notable concession by permitting developers to inform app users about external payment options via email or phone, but the company maintained its prohibition on in-app notifications. Responding to this, Epic Games facilitated direct purchases through its platform, contravening Apple’s policy. Apple’s response was swift – it removed the popular game Fortnite from its App Store, setting the stage for a protracted legal battle.

In 2021, U.S. District Court Judge Yvonne Gonzalez Rogers ruled in favor of Apple on certain antitrust claims but found that Apple’s anti-steering policy violated California’s unfair competition law. This judgment resulted in an injunction mandating Apple to allow developers to integrate in-app links to payment alternatives outside of Apple’s platform. Both Apple and Epic Games have subsequently appealed this decision, with the 9th Circuit temporarily suspending the injunction’s enforcement while awaiting review by the Supreme Court. Further arguments from both sides are expected in the near future, underscoring the complexity of this ongoing legal saga.

Key takeaways

  • Tech groups seek Supreme Court review of Apple’s anti-steering policies, fearing consequences for free iOS apps and developer costs
  • Apple vs. Epic Games: ongoing legal clash rooted in in-app purchase rules and commissions
  • App Store payment policies impact app downloads and fees, sparking industry concerns and legal battles

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