Appeals court backs contempt finding against Apple, but reopens a door for iPhone app fees
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FILE - An Apple logo adorns the facade of the downtown Brooklyn Apple store on March 14, 2020, in New York. Photo by Kathy Willens /APArticle contentA federal appeals court on Thursday backed a ruling that held Apple in civil contempt for brazenly defying an order designed to open its iPhone app store to other payment systems besides its own, but the decision also reopened a door for the company to collect commission from the rival options.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe unanimous decision by a three-judge panel for the Ninth Circuit Court of Appeals mostly validated a scalding contempt order issued in April by U.S.
District Judge Yvonne Gonzalez Rogers for violating a key part of her September 2021 findings in a legal battle instigated by video game maker Epic Games.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentBut the Ninth Circuit’s 54-page decision overturned one key part of Gonzalez Rogers’ civil contempt crackdown that prohibited Apple from collecting commissions when consumers make an e-commerce purchase within an iPhone app through a payment systems that operate outside of Apple’s control.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe appeals judges decided the ban that would have prevented Apple from imposing fees on rival payment options was too severe and ordered Gonzalez Rogers to reopen the case to determine a fair commission rate that the Cupertino, California, company, can charge. The ruling provided some general guidelines for how Gonzalez Rogers might determine a fair commission on external payment systems, but didn’t make any suggestions about what the percentage might be.Article contentNeither Apple nor Epic immediately responded for requests for comment late Thursday.Article contentBut the appeals decision agreed Apple had made a mockery of Gonzalez Rogers’ attempt to create more payment competition in the iPhone app store as part of a case that began in 2020. That’s when Epic, the maker of the Fortnite video game, filed a lawsuit alleging Apple had set up a price-gouging system within the iPhone app store that had turned into an illegal monopoly.Article contentArticle contentEpic’s case targeted Apple’s iron-clad control over all its devices and software — an approach that has become known as the company’s “walled garden.”Article contentAs part of the strategy, Apple required all in-app purchases on iPhones to be made through its own payment processing system while collecting commissions ranging from 15% to 30%. Those commissions have become a huge moneymaker within a services division that brings in more than $100 billion in annual revenue for Apple.Article contentAlthough Gonzalez Rogers rejected Epic’s assertion that the iPhone app store had turned into an illegal monopoly in her 2021 decision, she ordered Apple to allow links to alternative payment options to be displayed within apps.Article contentApple continued to fight the alternative payment option in appeals before being rebuffed by the U.S. Supreme Court i n January 2024.Article contentThe company then announced it would charge commissions ranging from 12% to 27% on iPhone app purchases made on alternative payment options — rates that remained so high that few developers decided to offer other choices.Article contentThat prompted Epic to allege Apple was in contempt of court, a claim Gonzalez Rogers embraced after a series of testy court hearings last year and earlier this year that led her to conclude the company’s efforts to allow alternative payment systems into the iPhone app store was little more than a “sham.”Article contentTrending CRA penalized taxpayer for repeated failure to report income Personal Finance Who is Mark Wiseman? The career of the man expected to be Canada’s new U.S. ambassador Finance This generation of Canadians is rapidly increasing its wealth and may soon unseat the boomers Wealth U.S. trade deficit unexpectedly shrinks to smallest since 2020 Economy The best mortgage rates in Canada right now Real Estate Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. CRA penalized taxpayer for repeated failure to report income Personal Finance Who is Mark Wiseman? The career of the man expected to be Canada’s new U.S. ambassador Finance This generation of Canadians is rapidly increasing its wealth and may soon unseat the boomers Wealth U.S. trade deficit unexpectedly shrinks to smallest since 2020 Economy The best mortgage rates in Canada right now Real Estate