In its Original Celebration of Epic Games”resounding victory,’ Apple is now Appealing the Decision
With potentially billions of dollars and some power over the App Store at stake, Apple has filed for an appeal of the judgement in its landmark trial against Epic. While Apple largely won that case (the company went so far as to call the ruling a “resounding victory”) with Judge Gonzalez Rogers ruling in favour of Apple in nine of the ten claims Epic brought against the company, it did lose in one important way: the judge found that Apple violated California’s anti-steering rules, and demanded that Apple let developers link to outside payment systems. That policy would have taken over in December, but it may be extended out beyond that – and it seems that’s the objective.
To protect consumers and defend its platform, Apple is asking for a delay of enforcement of the new anti-steering laws. If we understand the document correctly, the company’s arguments are fairly telling.
For instance, Apple claims that the new anti-steering rule is unnecessary because the company had already agreed to delete the offending section of its App Store Guidelines in the Cameron v. Apple settlement, but that’s news to us: at the time, Apple only agreed to “clarify” that app developers were allowed to communicate with consenting customers, not link to outside payment systems. That clarification was largely perceived by developers as a red herring. At the time, Apple didn’t say anything about eliminating a portion of its App Store Guidelines entirely.
It also looks like Apple is actually scared that the court order would force them to open up the App Store to different payment mechanisms, despite what some Apple commentators have said. A button might actually be a button:
Links and buttons to alternate payment mechanisms are fraught with risk. Users who click on a payment link embedded in an app—particularly one distributed through the curated App Store—will expect to be led to a webpage where they can securely provide their payment information, email address, or other personal information.
Apple goes on to say that if it were forced to allow app developers to link to other payment systems, it wouldn’t be able to safeguard customers against fraud:
While Apple could examine the links in the version of the app submitted for review, there is nothing stopping a developer from changing the landing point for that link or altering the content of the destination webpage. Additionally, Apple currently has no ability to determine whether a user who clicks on an external link actually received the products or features she paid for. Apple already receives hundreds of thousands of reports each day from users, and allowing links to external payment options would only increase this burden. In essence, the introduction of external payment links, particularly without sufficient time to test and evaluate the security implications, will lead to the very same security concerns that Apple combats with the use of IAP more generally, which the Court agreed were legitimate, procompetitive reasons for the design of the App Store.
There are a number of unresolved questions regarding how successfully Apple safeguards App Store users – it was only this past week that the company launched a capability to readily report blatant App Store scams.
The company also quotes a blog post from (and The Verge’s report about) Paddle, a would-be rival to Apple’s in-app payments that surfaced following the Epic v. Apple verdict, using it to show one prospective threat to consumers.
Not because of its lower fees, of course, but because “In contrast to Apple’s strict rules surrounding privacy, that developer intends to provide access to user email addresses.”
Other points are offered as well, which you can read in full in the PDF included at the bottom of this post. Overall, the company says that the “precipitous implementation of this aspect of the injunction would upset the careful balance between developers and customers provided by the App Store, and would irreparably harm both Apple and consumers.”
Apple also references a previous decision, Ohio v. AmEx, as evidence that transaction platforms like the App Store can encourage competition despite steering restrictions. (AmEx doesn’t double as a software marketplace, though.)
It’s crucial to emphasise that Apple has simply filed for appeal; we don’t know if the court will approve the appeal — and the stay— just yet. When the verdict originally landed in in September, Apple stated at the time that it hadn’t decided whether to appeal.
For its part, Epic declared its desire to appeal on the same day Judge Gonzalez Rogers delivered her order and permanent injunction against Apple. It was evident from the beginning that Epic wasn’t happy.
Epic CEO Tim Sweeney issued his answer to the appeal, and it’s pretty much what you’d expect:
— Tim Sweeney (@TimSweeneyEpic) October 9, 2021