What's happened
The Ninth Circuit Court of Appeals largely upheld a contempt order against Apple, affirming that its restrictions on external payment options violate court injunctions. The court ordered a review to determine fair commission rates, signaling a significant shift in app store payment policies and competition laws.
What's behind the headline?
The Ninth Circuit's decision marks a pivotal moment in app store regulation, affirming that Apple's restrictions on external payment options are unlawful. The court's rejection of Apple's broad restrictions and its acknowledgment of bad faith in resisting court orders will likely accelerate the adoption of outside payment processors. Epic's CEO, Tim Sweeney, predicts that web-based payments will become standard on iOS by the end of 2026, challenging Apple's longstanding control. This ruling exposes Apple's 'walled garden' approach as increasingly vulnerable to legal and regulatory pressures, potentially leading to a more competitive app marketplace. The decision also highlights the broader global debate over digital monopolies and fair competition, with regulators worldwide watching closely. The case underscores the importance of court oversight in curbing corporate overreach and fostering innovation, but the ultimate impact will depend on how courts set fair commission rates and how quickly developers adopt outside payment systems.
What the papers say
The Ars Technica article by Kyle Orland details the court's affirmation that Apple's attempts to impose high fees and restrict external payment options violate court orders, emphasizing the potential for large-scale change in iOS payment policies. The AP News and The Independent articles confirm the court's decision to overturn the ban on Apple collecting commissions on external payments, and highlight Epic's criticism of Apple's resistance and the court's recognition of bad faith. Both sources note that the ruling opens the door for further legal review of fair commission rates, with Epic and other developers expected to rapidly adopt outside payment processors. The coverage underscores the ongoing legal and regulatory pressure on Apple to loosen its control over the App Store ecosystem.
How we got here
This legal battle began in 2020 when Epic Games accused Apple of monopolistic practices by requiring all in-app purchases to go through its payment system, collecting 15-30% commissions. A 2021 court ruling ordered Apple to allow links to alternative payment options, but Apple continued to resist, leading to ongoing litigation. The recent appeals court decision affirms that Apple’s restrictions violate court orders, but stops short of setting specific commission rates, instead reopening the case for further review.
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Yvonne Gonzalez Rogers is a United States District Judge of the United States District Court for the Northern District of California.
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Epic Games, Inc. is an American video game and software developer and publisher based in Cary, North Carolina. The company was founded by Tim Sweeney as Potomac Computer Systems in 1991, originally located in his parents' house in Potomac, Maryland.
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Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services.