OAKLAND, Calif. (CN) — Apple returned to federal court this week to battle claims that it violated an order barring it from restricting developers who want App Store users to purchase products directly from them.
U.S. District Judge Yvonne Gonzalez Rogers oversaw the first of several evidentiary hearings Wednesday, after finding that Epic Games presented sufficient evidence that Apple violated her 2021 injunction on preventing developers from adding external links and other buttons in their apps.
She told Apple on Wednesday that it seems like the tech giant's new restrictions on developers in the United States may increase its opportunities to profit from user purchases.
The Barack Obama appointee also called Apple’s witness testimony “quite rehearsed." She questioned how introducing new obstacles when users choose to make purchases outside of the App Store is necessary, if Apple already vets developers to prevent scams.
Epic Games originally brought antitrust claims against Apple in 2020, claiming the tech giant engaged in anticompetitive practices by forcing companies to use its proprietary tools to develop and distribute apps on its App Store. Not only do all apps move through the App Store, but Apple requires app developers to use its in-app purchase system to conduct transactions. Epic Games called Apple’s system a “walled garden,” locking iPhone users into a closed platform where they can only download apps from Apple.
On the stand Wednesday, App Store chief Matt Fischer described how new guidelines apply to regulate services developers offer in the United States. The guidelines as of March 15 require that users know when they are purchasing a product outside of the App Store and see a warning when they click a link to visit an external website.
Apple does this to “protect the user from frauds and scams” within its system, Fischer said, adding some aspects of Rogers' injunction might create risks for users.
“But if you thought the app was a fraud or a scam, you don’t want it on the App Store in the first place,” Rogers said.
Lauren Moskowitz for Epic Games questioned Fischer about Apple’s changes in the U.S., saying it erected new obstacles by forbidding developers from displaying a message telling users that they can avoid Apple’s service fee by clicking out of the App Store and purchasing products externally.
Apple requires developers to offer its in-app and external options to purchase products, and earns revenue from a fee to do so each time. It also gets a 27% commission if a user selects the option to purchase a product in-store even if they ultimately buy it from an external website within seven days, Moskowitz said.
“So no matter how that user navigates to go to that website … for seven days, for every single purchase they make in that window, 27% (goes) to Apple,” Moskowitz said.
Rogers told Fischer: “It sounds like it gives you more access to more purchases, and is a windfall."
The parties return to court Friday.
Epic Games wants Rogers to hold Apple in civil contempt for violating the injunction and to order the tech giant to remove all anti-steering provisions in its developer guidelines. The company said that “the web of technical requirements, economic hurdles and user frictions imposed through Apple’s new policies" amount to “a de facto prohibition on external links.”
Apple said last month in a 37-page response brief that it complied with Rogers’ order by giving developers greater ability to “make users aware of alternative purchase mechanisms both within and outside their apps while continuing to prioritize privacy and security.”
“Epic has repeatedly made clear that what it wants is access to and use of Apple’s tools and technologies without having to pay for them,” Apple said. “It claimed such a right under the antitrust laws even though it has never denied the significant benefits it receives from the iOS ecosystem — including access to Apple’s large and loyal user base. It took that battle all the way up to the Supreme Court and lost.”
In January, the Supreme Court declined to review the case following Epic Games’ failed appeal of Rogers’ 2021 order. Epic had argued the Ninth Circuit’s ruling to leave Rogers’ order in place went against Supreme Court precedent and had applied the wrong test, resulting in serious harm to iPhone users and developers.
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