The US Supreme Court has decided not to hear appeals from both Apple and Epic Games in the ongoing dispute over App Store fees. The decision upholds a previous judge’s ruling, requiring Apple to permit developers to offer alternative payment methods for apps and services, bypassing the App Store’s 30 percent commission. The Supreme Court did not provide an explanation for rejecting the appeals, resulting in the continuation of the permanent injunction allowing developers to avoid the App Store’s commission.
Apple had sought a review by the high court in September of the circuit court’s decision, which the tech giant deemed “unconstitutional.” The legal battle initiated by Epic Games marks the first significant challenge to the App Store’s business model, a crucial revenue stream for Apple, generating billions annually. In May 2023, Apple reported that developers garnered approximately $1 trillion in total billings through the App Store in 2022, with gaming apps contributing an estimated $100 billion in revenue yearly.
While the Ninth Circuit ruled in favor of Epic’s appeal, affirming that Apple violated California’s Unfair Competition law, it rejected the claim that the App Store constitutes a monopoly. In addition to dismissing Apple’s appeal, the Supreme Court declined to review Epic’s assertion that the district court had committed “legal errors.”
Epic Games contended that Apple’s business model breached federal antitrust laws, but the Supreme Court will not address this aspect. Tim Sweeney, CEO of Epic Games, expressed disappointment over the denial of the appeal, calling it “a sad outcome.”
Epic Games has been at the forefront of challenging Apple’s developer transaction fee policy since 2020, with other companies like Spotify and the New York Times also seeking to contest app store policies on Apple and Google platforms. The Coalition for App Fairness, comprising over 60 companies, advocates against mandatory exclusive use of app stores by developers. The Epic lawsuit is just one of the challenges faced by Apple, with reports suggesting the Department of Justice (DOJ) is considering filing an antitrust case. The DOJ is investigating whether Apple’s App Store practices have stifled competition in the industry.
