Back in September, we finally saw something resembling a conclusion to the lengthy court battle between Apple and Epic. Apple largely came out on top with that one, as the court ruled in Apple’s favor with one big exception: the court ruled that Apple must allow app developers to offer external payments in their games and apps. Now, the Ninth Circuit Court of Appeals has reversed that decision, delaying the implementation of this ruling until a future date.
Apple keeps its cut of in-app payments (for now)
The Ninth Circuit Court of Appeals has overturned the order in the previous ruling that would force Apple to allow developers to link to external payment methods for in-app purchases or subscriptions (via The New York Times). This is a big deal for Apple, and it’s a decision that came at the 11th hour because without it, Apple would have needed to start allowing those outbound links in iOS apps beginning today.In the order handed down by the Ninth Circuit Court of Appeals (PDF), three justices argue that Apple’s appeal “raises serious questions on the merits of the district court’s determination that Epic Games, Inc. failed to show Apple’s conduct violated any antitrust laws but did show that the same conduct violated California’s Unfair Competition Law.”The order from these three justices grants Apple a “permanent injunction pending appeal,” which essentially means that Apple can’t be forced to implement this new rule until the appeals process for the original ruling is over. As The New York Times notes, that’s a process that could take over a year, meaning Apple has been given a significant period of time before it has to implement these rules handed down by the court.
Why this is a big deal for Apple
Previously, Apple required that apps and games offering in-app purchases use the iOS App Store as their payment processor. This was a significant source of revenue for Apple because the company takes 30% of every purchase made through the App Store, whether those are upfront costs associated with paid apps, one-time in-app purchases such as microtransactions in games, or recurring subscriptions such as Spotify Premium.
Epic Games kicked off this lengthy courtroom battle in mid-August 2020, when it began advertising a new Fortnite payment scheme that would sidestep the iOS App Store (and the Google Play Store on Android), taking users to an external payment processor owned by Epic and giving players a 20% discount on V-Bucks purchases for the trouble. That, in turn, drew the ire of Apple, which removed Fortnite from the iOS App Store later that day.
Epic responded to that by filing a lawsuit against Apple, accusing the company of “monopolist” practices with the iOS App Store. It was a busy day for Epic Games, but fast forward more than a year later, and the court found that Apple was mostly in the right, save for this exception regarding external payments for iOS apps.
For now, that ruling isn’t going into effect. Until the appeals process for the original lawsuit is over, Apple doesn’t need to allow iOS developers to link out to external, direct payment processors, which means that for the foreseeable future, all in-app purchases on iOS will be carried out by the App Store.
Keyword: Game-changing Apple legal ruling delayed at last minute