On Thursday, December 11th, Apple successfully persuaded the United States Ninth Circuit Court of Appeals to overturn part of a lower court’s ruling that found Apple in contempt of court, and requested adjustments to the original decision. However, the Appeals Court upheld the main injunction against Apple and most of the contempt of court findings.
This appeal case in San Francisco stemmed from the challenge by Epic Games, the developer of “Fortnite,” against Apple’s App Store business model. The Ninth Circuit Court of Appeals ruled in this case that the lower court’s April ruling was too broad and needed modifications.
A panel of three judges from the Ninth Circuit Court of Appeals modified some of the lower court’s decisions, which prohibited Apple from charging commissions or fees to consumers outside of its App Store for purchases. The Appeals Court stated that Apple could charge a “reasonable commission” on external purchases but with restrictions.
Tim Sweeney, CEO of Epic Games, welcomed the Appeals Court’s ruling, stating that it prevents Apple from charging developers “exorbitant fees.” He expressed that this decision would benefit both developers and consumers.
“After years of Apple’s obstruction, we will finally see significant reform,” Sweeney said.
In 2020, Epic Games sued Apple, accusing the company of limiting transaction methods within its iOS operating system apps and controlling how consumers access applications. In 2021, the lower court ruled that Apple must allow developers to include links in their applications to direct users to alternative purchase methods.
Following this, Apple removed some restrictions but also introduced new regulations, including charging a 27% commission on purchases completed within seven days after clicking external links. If purchases are made within the App Store, Apple charges developers a 30% commission.
Epic Games alleged that Apple’s increase of the commission to 27% violated the previous injunction and requested the court to find Apple in contempt, which Apple denied.
In April of this year, U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple violated the 2021 injunction and imposed a new injunction on Apple for charging commissions on purchases made outside the apps, also referring Apple’s case to federal prosecutors to investigate whether it constitutes criminal contempt of court.
The latest ruling by the Appeals Court specifies that Apple can charge commissions on external purchases within certain limits but with restrictions.
Apple argued during the appeal that the new injunction expanded the scope of the original injunction. The Appeals Court rejected Apple’s argument that the injunction should not apply to companies or individuals outside of Epic Games.