Appeals court upholds majority of Apple’s App Store policies

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On Monday, the Ninth Circuit Court of Appeals upheld the majority of Apple’s App Store policies and security restrictions in the antitrust lawsuit against Epic Games.

The ruling reaffirmed that Apple’s App Store and its security measures did not violate antitrust laws. However, the court also found that Apple couldn’t maintain anti-steering policies that barred users from learning about alternative payment options.

The legal saga between Epic Games and Apple began in 2020 when Apple removed Fortnite from the App Store after the game allowed users to make in-app purchases through Epic’s own payment processor. Epic Games filed a lawsuit against Apple, accusing the company of “unfair and anti-competitive actions.”

In 2021, Judge Yvonne Gonzalez Rogers ruled that Apple did not have a monopoly on the mobile app market but ordered Epic to pay for violating Apple’s developer agreement. The judge also instructed Apple to remove its anti-steering policies. Both companies appealed the court’s decision in 2021.

The recent appeals court ruling stated that the district court “erred as a matter of law on several issues,” but the errors were deemed “harmless.”

Furthermore, the court concluded that Epic “failed to propose viable less restrictive alternatives to Apple’s restrictions”.

Epic Games CEO Tim Sweeney responded to the ruling on Twitter, noting that the decision frees iOS developers to send consumers directly to the web to do business with them there. Sweeney also added that his team was working on the next steps.

Apple has taken measures to address antitrust concerns, including introducing a way for “reader” apps to bypass Apple’s in-app payment requirements by linking to their own sites. However, Spotify still faced issues when selling audiobooks on its iOS app, leading it to remove audiobook purchases from its iPhone app altogether.

iOS 17 is widely expected to lay the groundwork for compliance with the EU’s forthcoming Digital Markets Act.

Under the act, Apple will be forced to allow third-party app stores to be “sideloaded” on its devices. Microsoft is already making preparations to launch its own third-party mobile app store on iOS and Android after the EU’s law comes into effect.

Apple has previously resisted calls to allow sideloading over claims that it endangers users.

In a letter to lawmakers last year, cybersecurity expert Bruce Schneier said that Apple’s concerns about sideloading were “unfounded” and that it’s “simply not true” that legislation such as the EU’s puts user privacy and security at risk.

“It’s fairer to say that this legislation puts those companies’ extractive business models at risk. Their claims about risks to privacy and security are both false and disingenuous and motivated by their own self-interest and not the public interest,” wrote Schneier.

“App store monopolies cannot protect users from every risk, and they frequently prevent the distribution of important tools that actually enhance security. Furthermore, the alleged risks of third-party app stores and ‘side-loading’ apps pale in comparison to their benefits.

“These bills will encourage competition, prevent monopolist extortion, and guarantee users a new right to digital self-determination.”

At least initially, Apple is expected to only allow sideloading in Europe.

(Photo by Tingey Injury Law Firm on Unsplash)

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