Judge Denies Apple’s Latest Attempt To Force Developers To Use Its App Store
Apple and its CEO Tim Cook just took a serious legal hit from Judge Yvonne Gonzalez Rogers, who rejected the consumer tech giant’s attempt to delay the results of the September ruling from Apple’s court battle with Epic Games from taking effect. Apple filed a motion to delay an injunction in its case against Epic Games. The injunction would have permitted developers to immediately direct their customers away from the iOS ecosystem (including the app store) to pay for whatever services their apps provide.
But the judge denied Apple’s motion, liberating developers from the tech giant’s restrictive (and highly profitable – for Apple) rules.
Judge Gonzalez Rogers said that Apple must comply with an earlier order that permits developers to direct their users away from iOS apps to pay for services, meaning Apple can’t take a cut of these purchases.
The ruling is just the latest twist in Apple’s legal battle with Epic Games. Apple tried to obtain an injunction to delay the judge’s order.
For context, Apple levies a 15% to 30% commission on all in-app purchases made in the App Store. a practice that Epic Games and other developers including music-streaming company Spotify have claimed is anti-competitive. Apple’s “anti-steering” rules mean developers are not allowed to tell users to go elsewhere – for example, to a web browser or their email – to purchase the same products. This rule effectively guarantees that Apple will take a cut of every single transaction, even though the company has often had no hand in developing these products.
As we reported, Judge Gonzalez Rogers ruled partly in favor of Apple in September, but also mandated that Apple must get rid of its anti-steering rules on the App Store, which many analysts interpreted as a win for Epic.
At one point (per the Verge), Judge Gonzalez Rogers apparently had taken issue with the fact Apple was asking for an indefinite delay. “You haven’t asked for additional time. You’ve asked for an injunction which would effectively take years,” Gonzalez Rogers said, per the Verge.
Apple now has until December 9 to start allowing developers to steer users away from their iOS apps for purchases such as subscriptions.
Why is this such a big deal for Apple? Well, under Cook, the company has depending increasingly on services revenue to maintain high levels of growth.
Just take a look at the two charts below from Apple’s latest quarterly earnings, released just a couple weeks ago.
In other words, the decision doesn’t exactly bode well for Apple’s growth in services sales.