Apple fires back at court’s ‘punitive’ App Store order in Epic case

After a couple of weeks of radio silence in the Epic Games, Inc. v. Apple Inc. case, Apple’s lawyers are now back with a vengeance in the Ninth Circuit. And this time, they’re not just pushing back on the original outcome, but also asking the Ninth Circuit to assign the case to a different judge if it is sent back to the district court.

As reported by Law360, in a new appeals brief filed Monday, Apple challenges the district court order that bars it from charging any commission on in-app purchases made outside of its ecosystem.

A quick refresher

You’re probably acquainted with the timeline: in 2021, Epic won an injunction that prohibited Apple from blocking developers from steering users to alternative payment methods. Then, in April, a new ruling found Apple in civil contempt for allegedly undermining the original injunction.

By then, U.S. District Judge Yvonne Gonzalez Rogers had had enough, and issued a sweeping new injunction. Among the new terms, Apple could no longer take any cut from purchases made outside its own in-app payment system, nor could it restrict how and where developers link out to third-party payment platforms.

What’s new?

In Monday’s filing, Apple said the updated order effectively rewrites the rules and punishes it for conduct that isn’t illegal under California’s Unfair Competition Law (UCL). It also argues that civil contempt powers are supposed to enforce existing orders, not impose harsher ones after the fact:

“The district court’s new prohibition against any commission on sales facilitated by Apple’s own platform has no basis in the original injunction, is fundamentally unfair, violates the UCL, and amounts to a taking in violation of the U.S. Constitution. Indeed, the court’s permanent imposition of a royalty of zero for a huge category of transactions can only be understood as a punishment. But civil contempt may not be used to punish. The new injunction’s amped-up provisions barring Apple’s ability to regulate steering are similarly flawed.”

Apple also pushed back on the idea that its 27% commission for purchases completed through external links was out of line, and argued that even if that number was deemed “too high”, the solution shouldn’t be to eliminate commissions altogether:

“There is a vast gulf between finding that Apple’s 27% headline commission was too high and declaring that Apple is longer allowed to charge any commission at all. Apple appreciates, and regrets, that the district court found that it did not comply with the original injunction. But the district court’s solution to that a penal, new injunction that is inconsistent on its own terms with the UCL cannot stand.”

In sum, Apple’s requests in the new appeal include:

• Vacating the new injunction that bans all commissions on external purchases
• Striking down the five additional restrictions on steering (such as button design, disclosure templates, and where external links can appear in the app)
• Reversing the civil contempt finding
• Terminating all injunctive relief based on new California precedent (an argument the judge has rejected in the past)
• Reassigning the case to a new judge if the case goes back to the district court

The last point is significant. Apple says that there is grounds for reassignment when “the original judge would reasonably be expected upon remand to have substantial difficulty in putting out of his or her mind previously expressed views or findings” or when “reassignment is advisable to preserve the appearance of justice,” and claims “Both circumstances are present here.”

In a statement to Law360, an Apple spokesperson said:

“Apple has spent decades earning users’ trust in the security, privacy, and innovative technology that the App Store provides, and we’re deeply concerned that this injunction now prevents Apple from continuing to protect our users in important ways. (…) We’re appealing this order to ensure that the App Store remains an incredible opportunity for developers and a safe and trusted experience for everyone.”

Epic, meanwhile, declined to comment.

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