The US Supreme Court has declined an appeal from Epic Games Inc., allowing Apple Inc. to retain its payment rules for the App Store. The decision means that developers will not be able to direct iPhone users to alternative purchasing options, as requested by Epic Games. Justice Elena Kagan, who is responsible for handling emergency matters from the 9th US Circuit Court of Appeals, denied Epic's request to implement the appeals court decision immediately. The appeals court had previously found that Apple's restrictions on developers violated California's Unfair Competition Law by limiting their ability to communicate about alternative payment systems.
Although Apple will benefit from the Supreme Court's decision, it may only be a temporary reprieve. The appeals court had put its ruling on hold to allow Apple to file an appeal with the Supreme Court later this year. If the justices refuse to hear the case, the appeals court's decision will come into effect. This legal dispute could have significant financial implications for Apple, which currently charges developers a commission of up to 30% for digital goods and services sold through the App Store. If the 9th Circuit's ruling were to stand, developers would be able to bypass these commissions by including links that direct users to process payments on external platforms rather than within the Apple ecosystem.
Both Apple and Epic Games have refrained from making immediate comments on the Supreme Court's decision. In court papers, Epic argued that the 9th Circuit had used an incorrect legal standard by postponing its ruling. The company expressed concern that the delay would harm not only Epic but also countless consumers and other app developers for a significant period. Apple, however, urged the Supreme Court to maintain the stay on the 9th Circuit's ruling, asserting that Epic's business has not been adversely affected by the disputed policy. Apple had previously removed the popular game Fortnite from the App Store after Epic implemented a workaround to avoid paying the 30% fee on in-app purchases.
Epic clarified that its subsidiaries still have apps available in the App Store, suggesting that its grievance is focused solely on the payment rules and their impact on the developer community. The outcome of this legal battle will have far-reaching implications not only for Apple and Epic Games but also for the entire app development industry and the billions of dollars of revenue involved.