Judge denies Apple's delay for mandated App Store payment changes
posted Saturday Nov 13, 2021 by Scott Ertz
Over the past year, the most-watched, and possibly the most important, legal challenge in the technology world has been the one between Epic Games and Apple. Epic Games claimed that Apple had violated anti-competition laws by forcing developers to use Apple's App Store payment system and blocking them from using their own, pre-existing payment systems. While the case ended in a nearly total loss for Epic Games, one of their claims was granted, and Apple wants to get out of the repercussions.
The one complaint that Apple lost resulted in the court requiring Apple to adjust its App Store policies. The company is being required to allow developers to include third-party payment systems in their apps. Previously, Apple only permitted in-app purchases, including subscriptions to services like Netflix and Spotify, to use the App Store system. But, Apple immediately fought the decision, asking the judge to stay the implementation while they appeal the decision. This week, U.S. District Judge Yvonne Gonzalez Rogers denied the motion. The denial of the stay means that Apple has just a few weeks to implement the required changes before the December 9, 2021 deadline. The Judge said in her ruling,
In short, Apple's motion is based on a selective reading of this Court's findings and ignores all of the findings which supported the injunction, namely incipient antitrust conduct including supercompetitive commission rates resulting in extraordinarily high operating margins and which have not been correlated to the value of its intellectual property. This incipient antitrust conduct is the result, in part, of the antisteering policies which Apple has enforced to harm competition. As a consequence, the motion is fundamentally flawed. Further, even if additional time was warranted to comply with the limited injunction, Apple did not request additional time other than ten days to appeal this ruling. Thus, the Court does not consider the option of additional time, other than the requested ten days.
That the injunction may require additional engineering or guidelines is not evidence of irreparable injury. Rather, at best, it only suggests that more time is needed to comply. Apple, though, did not request additional time to comply. It wants an open-ended stay with no requirement that it make any effort to comply. Time is not irreparable injury.
As expected, Apple disagrees with this ruling. The company has said that it will appeal this decision, as well as the original requirement. In a statement, a spokesperson said,
Apple believes no additional business changes should be required to take effect until all appeals in this case are resolved. We intend to ask the Ninth Circuit for a stay based on these circumstances.
Unfortunately for Apple, that is not how this works. The ruling stands until it is overturned by a higher court, meaning they are required to comply until something changes. To get a stay, you have to show that the ruling as it stands would cause irreparable harm to the company, which they did not successfully argue is the case here.
Unfortunately for Epic Games, this ruling does not help them at all. As part of the initial incident, Fortnite was removed from the App Store, and Apple has stated that they will not be reinstating the game. So, while this is a good ruling for the industry, it is a neutral ruling for the company that brought the original challenge. Epic Games plans to appeal the 9 challenges that it lost, and Apple plans to appeal the 1 that it lost, as well as this ruling. So, while the situation is settled for the moment, the overall case is just getting started.