“Reasonably Necessary” External Purchase Fee
Apple should be able to collect a reasonable commission on purchases made using external links included in iOS apps, the U.S. Court of Appeals ruled today (via Reuters). The U.S. Court of Appeals partially reversed sanctions imposed on Apple after Apple was found to have willfully violated an injunction in the ongoing Epic Games vs. Apple legal battle.
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Apple is not going to be able to start charging a commission immediately, though. The case has been sent back to the district court so that a reasonable fee can be determined.
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Apple can restrict developers from making external links more prominent than in-app purchase options. Specifically, Apple can restrict a developer from putting buttons, links, or other calls to action in more prominent fonts, larger sizes, larger quantities, and more prominent places than buttons for in-app purchases. Apple has to allow developers to place buttons in “at least” the same fonts, sizes, and places as Apple’s own.
Kyle Orland (Hacker News, Slashdot):
The ruling, signed by a panel of three appellate court judges, affirmed that Apple’s initial attempts to charge a 27 percent fee to iOS developers using outside payment options “had a prohibitive effect, in violation of the injunction.” Similarly, Apple’s restrictions on how those outside links had to be designed were overly broad; the appeals court suggests that Apple can only ensure that internal and external payment options are presented in a similar fashion.
The appeals court also agreed that Apple acted in “bad faith” by refusing to comply with the injunction, rejecting viable, compliant alternatives in internal discussions. And the appeals court was also not convinced by Apple’s process-focused arguments, saying the district court properly evaluated materials Apple argued were protected by attorney-client privilege.
While the district court barred Apple from charging any fees for payments made outside of its App Store, the appeals court now suggests that Apple should still be able to charge a “reasonable fee” based on its “actual costs to ensure user security and privacy.” It will be up to Apple and the district court to determine what that kind of “reasonable fee” should look like going forward.
“If you want to have an app go through review with custom linkouts, maybe there’s several hundred dollars of fees associated with that every time you submit an app, which is perfectly reasonable because there are real people at Apple doing those things and Apple pays them, and we should be contributing to that,” Sweeney says. But he says that the ruling, “completely shuts down, I think, for all time, Apple’s theory that they should be able to charge arbitrary junk fees for access.”
With these two areas that Apple would be allowed to charge for, Sweeney says that “I can’t imagine any justification for a percentage of developer revenue being assessed here.”
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The ruling wasn’t the only big news for Epic and Fortnite on mobile today: the game also returned to Google Play in the US after similarly being booted by Google when Epic added the in-app payments system to Fortnite. Epic and Google announced last month that they have agreed to settle their lawsuit, and while the two sides are still seeking court approval for their settlement, it resolves their disputes worldwide.
The court ruling is confusing.
It says Apple can charge “necessary” costs for use of its IP but seems to interpret IP extremely narrowly to apply only to external links?
I’m not even sure what that IP is supposed to be.
Previously:
- Fortnite Returns to US App Store
- Court Orders Apple to Comply With Anti-Steering Injunction
- Testimony on External Purchase Fee and Scare Screens
- Epic’s Document Request and Apple’s Injunction Challenge
- Hearing for Apple Violating Epic’s Injunction
- Epic Challenges External Link Rules and Commission
- StoreKit Purchase Link Entitlement for United States
