The Supreme Court has rejected a request by both Apple and Fortnite developer Epic Games to appeal a lower court’s ruling on the alleged anti-competitive nature of Apple’s App Store. The decision not to take the case to trial was somewhat of a surprise, given that a jury trial recently found Google guilty in a similar antitrust battle with Epic. With the nation’s highest court refusing to weigh in on Apple’s status, that means the original ruling still stands. Apple had largely won its case, as the judge ruled that Apple had not engaged in anti-competitive practices. But there was one area where Apple should concede ground to developers, the court had ruled – it said app makers should be able to direct their customers to the Web from links within their apps.
This twist on Apple’s “anti-directive” rules for its App Store is what initially caused the tech giant to resonate. It doesn’t want to allow app developers to market their own websites and payment mechanisms from within iOS apps, which could reduce purchases made on its App Store — and therefore reduce Apple’s developer revenue through commissions her.
Developers, however, want to have a direct relationship with their customers. And for consumers, there may be a benefit to web transactions, as in-app purchases or subscriptions may be available at a lower price than in the App Store, as the developer no longer has to pay the “tax of Apple’ or the supplies.
In a statement, Epic Games CEO Tim Sweeney called the Supreme Court’s decision not to take up the case a “sad outcome for all developers,” but said “the fight goes on.”
“The Supreme Court has rejected both sides’ appeals in the Epic v. Apple antitrust case. The court battle to open up iOS to competing stores and payments has been lost in the United States. A sad outcome for all developers,” Sweeney said in a prepared statement. Now the District Court’s ban on Apple’s anti-stealth rule is in effect, and developers can include in their apps “buttons, external links, or other calls to action that direct customers to purchase mechanisms, other than IAP” , he continued.
“Starting today, developers can begin exercising their court-established right to inform US customers of better prices on the web. Those hideous Apple-mandated screens of confusion are over and over forever. The fight continues. Regulators are taking action and policymakers around the world are passing new laws to end Apple’s illegal anti-competitive app store practices. The European Union’s Digital Markets Act comes into effect on March 7,” Sweeney noted.
Apple in April 2023 had won its appeals court dispute with Epic, the US Ninth Circuit Court of Appeals ruled. The court upheld the district court’s earlier ruling on Epic’s antitrust claims, but also the lower court’s ruling in Epic’s favor under California’s unfair competition law, which will require Apple to remove the “anti-direction” clause from its agreement with App Store developers. .
The latter could potentially result in the tech giant losing billions in annual revenue if app makers can successfully redirect their customers to pay for purchases and subscriptions over the web. Apple investors immediately understood the impact of this decision, as Apple stock fell more than two and a half percent shortly after the news broke. It has since rebounded slightly and is currently down 1.09% as of press time.
“The Supreme Court’s decision to reject Apple’s appeal confirmed that the company’s anti-direction policy is illegal, anti-competitive and must be ended,” said Rick VanMeter, executive director of the Coalition for App Fairness lobby group, which includes Epic Games, Spotify, Tile, Match and more. “It’s a win that developers can now direct their customers to their websites to make purchases, which will lower prices and increase consumer choice. This is a step in the right direction and highlights the need for legislation — such as the Open App Markets Act — to create an open and free app store ecosystem,” he added.
