Apple Appeals Injunction Forcing It to Allow External Payment Links

As expected, Apple has filed an appeal against an injunction that forced the company to allow developers to include links to external payment options.
Apple Appeals Injunction Forcing It to Allow External Payment Links
Written by Matt Milano

As expected, Apple has filed an appeal against an injunction that forced the company to allow developers to include links to external payment options.

Apple suffered one of its biggest legal setbacks last week, with Judge Yvonne Gonzalez Rogers slamming the company for ignoring her previous injunction ordering Apple to allow developers to direct users to alternate payment methods. The injunction was one the one point—out of ten—that Apple lost in its case versus Epic Games.

Unfortunately rather than willingly complying, Apple is accused of throwing up roadblocks and charging a 27% commission even for purchases made outside the App Store, using alternate payment methods. To make matters worse, there was internal debate within Apple about its compliance with the injunction. Apple Fellow Phil Schiller pushed for the company to comply with the initial injunction, but CEO Tim Cook sided with CFO Luca Maestri’s recommendation to squeeze out every possible drop of profit, leading the company down the path that resulted in Judge Rogers’ latest ruling.

To summarize: One, after trial, the Court found that Apple’s 30 percent commission “allowed it to reap supracompetitive operating margins” and was not tied to the value of its intellectual property, and thus, was anticompetitive. Apple’s response: charge a 27 percent commission (again tied to nothing) on off-app purchases, where it had previously charged nothing, and extend the commission for a period of seven days after the consumer linked-out of the app. Apple’s goal: maintain its anticompetitive revenue stream. Two, the Court had prohibited Apple from denying developers the ability to communicate with, and direct consumers to, other purchasing mechanisms. Apple’s response: impose new barriers and new requirements to increase friction and increase breakage rates with full page “scare” screens, static URLs, and generic statements. Apple’s goal: to dissuade customer usage of alternative purchase opportunities and maintain its anticompetitive revenue stream. In the end, Apple sought to maintain a revenue stream worth billions in direct defiance of this Court’s Injunction.

Ultimately, Judge Rogers referred the case to the attorney general for investigation into possible criminal contempt charges, specifically pertaining to the testimony of Apple VP of Finance Alex Roman. Judge Rogers accused Roman of lying on the stand and indicated Apple shared culpability by not refuting his testimony, instead opting to let it remain on the record.

Meanwhile, Apple vowed to appeal the ruling and how now done so. The appeal was filed with the US court of Appeals for the Ninth Circuit.

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