Epic celebrates “the end of the Apple Tax” after appeals court win in iOS payments case

In a landmark decision, the Ninth Circuit Court of Appeals has largely upheld a previous contempt ruling against Apple, reinforcing the judgment made by District Court Judge Yvonne Gonzalez Rogers in April. This ruling found that Apple had willfully violated an injunction aimed at opening up payment options for iOS developers. Epic Games' CEO, Tim Sweeney, expressed optimism regarding the ruling, stating that it could significantly benefit developers and instigate changes to the App Store landscape globally. The appellate court, comprised of a panel of three judges, confirmed that Apple's initial attempt to impose a hefty 27 percent fee on developers opting for external payment methods had a restrictive impact, contravening the injunction. The court criticized Apple for imposing overly broad restrictions on how external payment links were designed, suggesting that the company should present both internal and external payment options similarly. Additionally, the ruling highlighted that Apple acted in bad faith by not adhering to the injunction and dismissing compliant alternatives during internal discussions. The appellate court also dismissed Apple's arguments centered around procedural claims, affirming that the district court accurately assessed materials Apple deemed protected by attorney-client privilege. While the district court originally prohibited Apple from charging fees for payments processed outside of its App Store, the appeals court acknowledged that Apple could still impose a 'reasonable fee' based on its actual costs related to user security and privacy. Moving forward, it will be up to Apple and the district court to define what constitutes a 'reasonable fee.' In a statement to reporters, Sweeney proposed that these fees should be minimal, suggesting amounts in the range of tens or hundreds of dollars for each iOS app update submitted for review. This approach, he argues, would ensure fair compensation for the employees reviewing applications while promoting a system of standard fees that align with regular business practices.