Microsoft, Meta, X, Match Group Challenge Apple App Store Terms

Bad news continues for Apple this week, as big names in the tech industry sided with Epic Games and alleged Apple is flouting a court order for its App Store terms in the United States.

The allegation was made by Microsoft, Meta Platforms, X Corp (formerly Twitter), and Match Group – all of which in a friend of the court filing backed Epic Games’ protest that Apple has failed to honour a court-ordered injunction governing payments in its lucrative App Store.

It comes after the Supreme Court in January 2024 had declined to hear a challenge by Apple to a lower court’s decision that could force it to allow third-party payment systems in apps distributed through its App Store in the US.

Payment allegations

The tech giants this week have alleged Apple was in “clear violation” of the September 2021 injunction by making it difficult to steer consumers to cheaper means to pay for digital content.

The filing this week in the US alleges “Apple’s response to the injunction clearly violates the Court’s orders. On 16 January 2024 – the same day that the US Supreme Court declined to hear Apple’s appeal of the Ninth Circuit’s decision upholding this Court’s injunction – Apple filed a Notice that the injunction also enjoins Apple from prohibiting developers from “communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”

“The Apple Plan comports with neither the letter nor the spirit of this Court’s mandate in its Trial Order and injunction. As described in Epic’s Motion to Enforce, the Apple Plan leaves in place anti-steering rules that this Court expressly found to be anti-competitive and imposes new restrictions on app developers that ensure the price competition that the injunction was designed to promote will never materialize.

Epic Games had sued Apple in 2020, in an effort to force Apple to allow third-party payment systems, as well as to allow third-party app stores on its devices.

Epic had alleged that Apple was acting as an illegal monopolist by requiring consumers to get apps through its App Store and buy digital content inside an app using its own system.

Apple charges up to a 30 percent commission for in-app purchases.

In 2021 US district judge Yvonne Gonzalez Rogers mostly rejected Epic’s antitrust claims against Apple.

However, the judge found that Apple had violated California’s unfair competition law by barring developers from “steering” users to make digital purchases that bypass Apple’s in-app system, which Epic argued could save them money with lower commissions.

The judge therefore ordered that Apple must allow third-party developers to provide links and buttons that direct consumers to other ways to pay for digital content that they use in their apps, bypassing Apple’s own payment system and the Apple commission.

In an April 2023 decision the Ninth Circuit court upheld the court order forcing Apple to allow alternative payment options, but blocked Epic’s demand for third-party app stores.

Last week, Epic had demanded that Apple be held in contempt, saying new rules and a new 27 percent fee on developers made the links effectively useless.

Apple has until 3 April to formally respond to Epic’s filing.

Apple response

Reuters meanwhile noted that Apple has declined to comment specifically on the accusation by the big name tech firms.

Instead, it reportedly referred to its 16 January statement that it had fully complied with the injunction, which it said would protect consumers and “the integrity of Apple’s ecosystem” while ensuring that developers do not get a free ride.

It has been a tough week for Apple.

Apple has now been sued by the US Department of Justice (DoJ), as well as 16 other states and district attorneys general, for alleged anticompetitive practices.

They allege Apple has made it harder to switch phones, hampered innovation, and imposed costs on developers.