Epic is Right to Sue Apple for End-Run Around Court Ruling

In the wake of this week’s Supreme Court ruling, Apple revealed that it would continue charging a fee apps direct users to alternate payment systems. This constitutes “bad-faith compliance” with the court-ordered remedy for Apple’s business practices abuses, Epic says, and so it plans to sue Apple to force them to meet its legal requirements.

“Apps on the App Store in the United States that offer in-app purchases can … include a link to the developer’s website that informs users of other ways to purchase digital goods or services,” a new Apple Developer support document notes, in what seems like a simple explanation for how it will meet the needs of its legal defeat. “[But] Apple is charging a commission on digital purchases [made via other payment systems, including those on the web]. Apple’s commission will be 27 percent on proceeds [that developers] earn from sales to the user for digital goods or services on your website … If you’re a participant in the Small Business Program, or if the transaction is an auto-renewal in the second year or later of an auto-renewing subscription, the commission will be 12 percent.”

As you may know, Apple now charges developers 30 percent or 15 percent on in-app purchases based on a variety of conditions, and so this new policy ensures that the company will still receive the lion’s share of the original fees even when a user makes purchases outside of the app on the web. This, despite a court ruling that Apple needs to let developers to communicate the availability of external payment systems inside of their apps. So Apple is meeting that specific requirement while skirting the actual point of the ruling, which is to allow third-party payment systems so that developers and users can save money.

“Apple has introduced an anticompetitive new 27 percent tax on web purchases,” Epic CEO Tim Sweeney tweeted in response. “Apple has never done this before, and it kills price competition. Developers can’t offer digital items more cheaply on the web after paying a third-party payment processor 3-6 percent and paying this new 27 percent Apple Tax.”

As Sweeney explains, this new App Store policy requires developers to adhere to Apple rules about the links they put in their own apps, and they cannot place Apple and third-party payment choices side-by-side. Apple also requires developers to use a generic web browser session, which requires users to log in to their website, an onerous additional step, and it will use a “scare screen” (shown above) to further dissuade users from pursuing the alternate payment method.

“Epic will contest Apple’s bad-faith compliance plan in District Court,” he concludes. Whatever your opinions on this case, it’s hard to imagine a court of law not agreeing with Epic on this one. Apple can be brazen, but this is a whole new level of terrible.