Apple files emergency hold to challenge App Store payment injunction

Apple has filed an emergency motion, asking a federal appeals court to put a pause on orders that would significantly change how the App Store works. Those changes, the company argued in its motion, will cost the company "substantial sums annually" and are based on conduct that hasn't been "adjudicated to be (and is not) unlawful." It said those orders were made to punish Apple for "purported non-compliance" to previous orders.  

If you'll recall, Judge Yvonne Gonzalez Rogers recently ruled that Apple had violated her 2021 ruling on the lawsuit Epic Games filed against Apple. In her original decision, the judge told the company to allow developers to direct users to other payment systems that would let them bypass the 30 percent commission fee Apple collects. But Apple still collected up to a 27 percent cut for external purchases, and it also showed users a "scare screen" warning them that paying outside the App Store would mean they wouldn't have the company's protection.

In her new ruling, Gonzalez Rogers ordered Apple to stop collecting fees for external payments immediately. She also prohibited Apple from creating rules that would prevent developers from presenting customers with buttons and links for external payments. Apple changed its guidelines to remove prohibitions on buttons and external links that direct customers to non-App Store purchasing mechanisms. However, it also appealed Gonzalez Rogers' decision and is now asking the court to put a stay on those two particular orders while its appeal is ongoing. 

Apple insisted in its motion that it is unlawful to prevent the company from taking a cut on linked transactions, because the original decision didn't say anything about commissions or pricing. It also argued that it's unlawful to prevent the company from setting conditions for link placement and language as the original injunction didn't say anything about it. That provision violates the First Amendment, Apple said, by forcing it to "accommodate messages it would prefer to exclude." The company accused the court of punishing it because, in its view, Apple "flouted the court's order."

"Without a stay, these extraordinary intrusions into Apple’s business will cause grave irreparable harm. Depriving Apple of control over core features of the App Store is, standing alone, sufficient to warrant a stay," the company wrote. "The district court acknowledged that compliance will cost Apple 'hundreds of millions to billions' of dollars annually... which Apple can never recoup. Consumers would suffer from the destabilizing effects of the new injunction, while Epic would not be harmed by a stay."

Epic Games called Apple's motion a "last ditch effort to block competition and extract massive junk fees at the expense of consumers and developers." In addition to the video game developer, other companies are also keen to offer external payments that would allow them to bypass Apple's commission. Spotify, for one, already submitted an update that would let users pay outside the App Store for customers in the US. 

When Gonzalez Rogers handed down her decision, it had revealed that App Store lead Phil Schiller advocated for the company to stop collecting fees on web links back in 2023. However, Apple's former Chief Financial Officer Luca Maestri convinced Tim Cook to do the opposite. She said the company's Vice-President of Finance, Alex Roman, lied under oath and told the court that Apple didn't decide on collecting a 27-percent fee on external purchases until early 2024, whereas the truth was that Apple had already decided on that percentage back in 2023. The judge has referred the case to the US attorney for the Northern District of California to investigate Apple and Roman for possible criminal contempt.

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