Court finds that Apple breached 2021 injunction with App Store rules

A federal court on Wednesday found Apple Inc. to be in breach of a 2021 injunction that had ordered it to ease the App Store’s terms of service.

Both rulings focus on the restrictions that the iPhone maker applies to in-app transactions. Apple must now revise several of those policies. “We will comply with the court’s order and we will appeal,” the company said in a statement.

The Wednesday order was issued in connection with a legal dispute that began in 2020. That year, Apple removed Epic Games Inc.’s popular Fortnite video game from the App Store. In response, Epic Games filed a lawsuit that accused Apple of breaching competition law.

At the time, the iPhone maker required developers to process in-app purchases using its own payment system. The system charged a fee equal to up to 30% of every transaction’s value. Apple didn’t permit developers to use third-party payment systems.

In 2021, the same judge that issued this week’s ruling ordered the iPhone maker to change its in-app transaction rules. It’s this latter order that Apple was found to breach.

After the 2021 ruling, the iPhone maker stopped blocking iOS developers from using third-party payment systems. However, it applied a 27% fee to purchases processed using such systems. Apple also placed restrictions on how apps could inform users that purchases may be competed with a third-party payment platform. 

“Apple sought to maintain a revenue stream worth billions in direct defiance of this court’s injunction,” District Judge Yvonne Gonzalez Rogers wrote in the Wednesday decision.

Apple has been ordered to stop charging fees for in-app transactions processed using third-party systems. Additionally, it may not restrict the manner in which apps direct users to external payment methods. The ruling bars Apple from “restricting or conditioning developers’ style, language, formatting, quantity, flow or placement of links for purchases.”

Another section of the decision focuses on the iPhone maker’s conduct during the legal proceedings. The court asked the U.S. Attorney for the Northern District of California to determine whether a criminal contempt probe should be launched into the matter.

Epic Games, the company behind the 2020 lawsuit that led to today’s ruling, today announced plans to return its Fortnite game to the App Store next week. The app will offer users a choice between Apple’s payment system and a lower-cost external alternative.

Separately, a U.K. appeals court today ruled that Apple must pay $502 million to a Texas company for using some of its wireless networking patents. The patents describe technologies that power the 4G features of some iPhones and iPads. Apple stated that it plans to appeal.

Image: Apple

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