Federal judge says tech group engaged in ‘incipient antitrust conduct’ to stop external payments
Apple says it will request another stay from the appellate court © AFP via Getty ImagesA federal judge has ordered Apple to comply with an injunction to open up its App Store to rival forms of payment, delivering a blow to the company that could result in the biggest forced change to the platform since it was created more than a decade ago.
Judge Yvonne Gonzalez Rogers, who is presiding over the iPhone maker’s legal fight with Epic Games, said on Tuesday that Apple was engaging in “incipient antitrust conduct” by prohibiting app developers from showing customers external links to pay for digital goods outside its own payment system.
She added that the anti-steering rules had resulted in “supercompetitive commission rates resulting in extraordinarily high operating margins [that have] not been correlated to the value of its intellectual property”.
Apple said it would request another stay from the appellate court. “Apple believes no additional business changes should be required to take effect until all appeals, in this case, are resolved. We intend to ask the Ninth Circuit [court of appeals] for a stay based on these circumstances,” a spokesperson said.
The Coalition for App Fairness, whose more than 60 members include Epic, hailed the court’s latest decision.
“While this is a modest concession that does not address the root of Apple’s anti-competitive behaviour, this injunction will provide much-needed relief to our members and developers worldwide,” executive director Meghan DiMuzio said. “No company, no matter how large or powerful, should be allowed to dictate how and when other companies communicate with their own customers.”
Judge Rogers had mostly ruled in Apple’s favor in September, denying nine of Epic’s 10 claims alleging that the tech group operated an illegal monopoly. Apple called the verdict a “resounding victory”.
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But the company last month appealed against the one count it lost, saying an injunction to let developers add links and buttons to non-Apple payment options would “irreparably harm both Apple and consumers”. The iPhone maker had asked for a stay until the appeals court had ruled on the matter.
Judge Rogers said Apple’s claims of “irreparable injury” were “exaggerated”.
She added: “Consumers are quite used to linking from an app to a web browser. Other than, perhaps, needing time to establish guidelines, Apple has provided no credible reason for the court to believe that the injunction would cause the professed devastation.”
In court earlier on Tuesday, Judge Rogers said she was against Apple’s request because the appeals process was likely to take “three, four, five years”.
She also denied Apple’s request for a 10-day extension to file an appeal to the Ninth Circuit. Pending appeal, the injunction ordering Apple to loosen its grip will take effect in a month.
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