Epic Games managed to force Apple into some App Store concessions with legal activity and campaigning, but it doesn’t seem to have gone the way it planned. In a court filing Epic lays out how it believes Apple has gone wrong with its steering rule changes.
The excruciatingly lengthy legal battles between Epic Games and Apple over In-App Purchasing and the App Store prompted a lot of outcry over how Apple conducts business with developers. With orders over anti-steering rules in an injunction, it seemed that Epic had gotten its way over some of its complaints to the court.
According to a Post Hearing Findings of Fact filing with the U.S. District Court for the Northern District of California, Epic seemingly did not. The filing is effectively a 41-page complaint from Epic to the court, insisting that Apple has to comply more with injunctions set out in its main U.S. lawsuit.
While filed with the court on March 7, the document is the opinion of Epic Games, and not a ruling by the court itself. Epic did previously accuse to the court in March 2024 that Apple didn’t comply with the injunction, while Apple insisted that same month that it was.
Barriers to alternative purchases
As part of the trial’s ruling, Apple was basically forced to allow developers to use processes and mechanisms for steering users to other payment systems, such as on the developer’s website. Epic insists that Apple did what it could to make the ruling effectively meaningless.
To Epic, this was performed by adding new fees and restrictions to the process, which would “render alternative purchasing options useless to developers.” Apple did this because following the “plain language of the Injunction,” competition would have “blossomed,” Epic believes, and it would have “threatened to shift billions of dollars in billings to cheaper and/or better options.”
Furthermore, after having years to plan a response, Apple used the time to work against the injunction by creating the “External Link Purchase Entitlement Program,” Epic continues. It was also allegedly made in a way that developers and consumers wouldn’t want to actually implement it at all.
“At every turn, Apple picked the worst option for developers and consumers in order to preserve Apple’s profits,” the filing states. “Apple continues to prohibit all buttons and all “other calls to action”, allowing only “links” to steer users outside the app.
Epic insists that the new fees and restrictions aren’t allowed by the injunction, which ordered Apple to remove its anti-steering guidelines. The injunction “never allowed Apple to change its longstanding business model” to make linked purchases the only non-IAP transactions that Apple charges a commission on, it adds, while also not condoning creating a program with draconian limits.
“Simply put, Apple purposely designed the Program to fail,” the filing insists. “And it’s efforts succeeded: no major app developer has even applied to participate.”
Managerial commission decision
The filing then touches upon the decision made by Apple’s management to enact a commission on these external transactions. This includes testimony from Apple executive Phil Schiller, that he was against the commission as that would put Apple at risk of violating the injunction.
However, Apple financial analysts determined that Apple could lose billions in revenue from the App Store to web purchases without a commission. Then-CFO Luca Maestri sided with those imposing a commission, with CEO Tim Cook following suit.
Epic then argued that, despite Apple taking a 3% rate reduction on the fee to 27%, due to external providers handling transaction fees and other costs, it would ultimately cost developers more than using a standard IAP for a transaction.
Link camouflage
Epic’s complaint also led to accusations that Apple would make it hard for consumers to actually use external links in the first place, by imposing other restrictions.
Apple reportedly considered ways of “severely limiting the placement, language, and design of steering options,” to reduce the number of people actually using them, without even considering a commission fee.
“Ultimately, Apple chose the worst of all worlds for consumers and developers” by doing both, Epic laments. “Apple knowingly doubled down on the risk of violating the Injunction to provide maximum protection to Apple’s profits.”
As part of Apple’s restrictions, developers can’t interrupt this purchase flow to offer external options
This included using “Orwellian nomenclature” when referring to buttons developers could use for links, prohibiting “calls to action” in various ways, and restricting their placement and messaging.
The use of “Scare Screens and Static Links” is also denounced by Epic, with Apple’s UX team designing “full screen, interstitial warning pages” to be used when users tap an external link. Also, by making a link less seamless by prohibiting the use of dynamic links, it forces developers into using the same generic landing page.
This apparently turns into a bad user experience, the filing insists.
Apple also apparently schemed to conceal its supposed non-compliance, with accusations employees “routinely misused attorney-client privilege labels” to hide planning materials. There’s also mention of Apple creating an “alternative set of sanitized business plans for judicial and public consumption” to perform a similar task.
Adoption issues
The ultimate result of Apple’s external link program is one where developers largely declined to participate.
In discussing a program in the Netherlands allowing dating apps to use alternative payment processes, as well as a similar program in South Korea, Epic offers that the take-up was extremely minimal. With the associated fees, it would be too cost prohibitive for large developers to take on.
The end result, according to Epic, is that after ten months of availability in the Netherlands and four months in Korea for its programs, only one developer had actually signed up for it.
A pleading for reconsideration
The filing concludes with Epic urging the court to have a look at the injunction, to see Apple’s actions, and to make Apple comply with the spirit of what was laid down.
Instead of complying, Apple started with the minimum action it could take to comply, “virtually assuring an endless game of whack-a-mole,” the filing outlines. Apple then apparently violated the injunction “with full knowledge that its conduct raised a compliance risk.”
Epic then claims Apple’s activity “makes it clear that Apple will continue to flout the Injunction if it is given free rein to develop another compliance” plan.” The court should therefore make clear its expectations to Apple, Epic writes.
Judge Gonzalez Rogers, presiding over the trial, has yet to determine whether Apple will be held in contempt of court for the violations.
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