Apple beat Epic Games 9-1 in court. Now it's appealed the one point it lost
Judge ordered Cupertino to stop steering users to its payments platform and Apple wants that paused, then erased
Apple has appealed one of its disputes against Epic Games, despite having mostly won the case.
The iGiant's legal stoush with Epic concerned the games developer's decision to sell virtual goods directly from within its smash hit game Fortnite, and to do so at a discount compared to prices offered in Apple's App Store. Epic did so, in part, to point out that Apple's 30 per cent cut of in-app purchases inflates the prices of apps and digital goods.
Apple responded by booting Fortnite from the App Store and cancelling Epic's developer account.
The dispute went to court and Apple mostly won – US District Judge Yvonne Gonzalez Rogers found Apple is not a monopolist and found in favour of the fruity company on nine of ten counts.
But Epic Games won on one count that concerns California's "anti-steering" laws – statutes that bar limiting choice of service providers.
To understand steering, consider the rules around making a car insurance claim in California. Insurance companies like to "steer" policy holders to repairers they know can do the job at a low price, which saves insurers money. California law believes that "steering" robs consumers of choice, therefore it allows policy holders to pick their preferred repairer regardless of an insurer's preference.
Judge Rogers found that by insisting on allowing only the App Store for purchases, Apple is on the wrong side of California steering laws and made an injunction that denies Apple the right to prohibit developers from using – or even suggesting – third-party payment options.
And as US law firm Sullivan and Cromwell wrote in a Memo: "The court's injunction opens the way for app developers to avoid Apple's 30 per cent in-app-purchase commission by giving them the ability to direct their customers to less-expensive alternatives".
Apple, therefore, remains at risk of losing the sweet, strong, and steady flow of revenue it says is essential to fund the App Store's ongoing secure operations.
Hence this appeal.
Apple's also asked for a stay of Judge Rodgers' injunction, in a filing [PDF] that says it's needed because following its requirements "would upset the careful balance between developers and customers provided by the App Store, and would irreparably harm both Apple and consumers.
"The requested stay will allow Apple to protect consumers and safeguard its platform while the company works through the complex and rapidly evolving legal, technological, and economic issues that any revisions to this Guideline would implicate."
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The filing also argues that Apple will win on appeal, and that Epic won't be harmed if the injunction is stayed because it has no products in the App Store.
Another thread of Apple's argument asserts that the injunction may have been applicable at the time the first case was decided, but as the app market and App Store evolves, it could be a blunt instrument that stops the company from responding to a changing market.
"Apple is working hard to address these difficult issues in a changing world, enhancing information flow without compromising the consumer experience," the filing states. "A stay of the injunction would permit Apple to do so in a way that maintains the integrity of the ecosystem, and that could obviate the need for any injunction regarding steering."
That hint that Apple could be open to arrangements that aren't considered steering is quite an admission, but also a nod to the realities the company faces after allowing some third-party payments in Japan, changing policies in the USA to reduce commissions paid by small developers, and the introduction of South Korea's law requiring access to third-party payment systems. ®