Apple, Epic Games to continue their legal war in Appeals Court tomorrow

The legal battle between Apple and Fortnite developer Epic Games continues on Monday. Oral arguments will be presented before a three-judge panel sitting on the Ninth Circuit Court of Appeals. The original ruling on the case came in September 2021 when Judge Yvonne Gonzalez Rogers ruled that Apple could not be compelled to include the Epic App Store on the iPhone. The judge also ruled that the success of the Apple Store “is not illegal”.
What Judge Gonzalez Rogers decided was that Apple should allow developers to allow their apps to redirect to third-party payment platforms, which would allow App Store customers to avoid using Apple’s in-app payment platform. Many developers are upset that Apple takes 15-30% of in-app payments made through its platform. In August 2020, Apple has removed the popular Epic Fortnite game from the App Store after the developer added a link to its own in-game payment platform, in violation of Apple policies.

If taken to the Supreme Court, a final ruling may not materialize until 2025

Don’t expect a quick decision from the Court of Appeal. According to Associated Press (AP), the appeals court could take six months to a year to issue its decision. And the losing party could decide to take the battle all the way to the Supreme Court. If that happens, this case could remain active until 2024 or even 2025.

The reason this issue is so important to Apple is because it’s about money. Some analysts estimate the Cupertino-based tech giant rakes in $15 billion to $20 billion each year from its shrinking revenue from App Store apps. Apple has always maintained that it uses this money to help defray the costs of the technology used for Apple’s iOS app storefront to make it safe and easy to use.

Tomorrow, the three judges hearing oral argument, Sidney R. Thomas, Milan D. Smith Jr. and Michael J. McShane, will first hear from Epic attorney Thomas Goldstein. The AP suggests that Goldstein will try to convince the panel that Judge Gonzalez Rodriguez erred when she considered the App Store and Apple’s integrated payment platform as separate markets instead of lumping them together.

The Justice Department will also try to convince the court that Judge Gonzalez Rodriguez interpreted federal antitrust law too narrowly, which could impact future actions against anticompetitive behavior in the technology market. While the DOJ won’t take sides, its arguments could help Epic show the three justices that they should overturn the lower court’s decision.

Another lawyer, this one from the California attorney general’s office, is expected to defend the law cited by Judge Gonzalez Rodriguez that allowed him to rule that Apple must allow developers to redirect apps to third-party payment platforms.

Ironically, Epic CEO Tim Sweeney uses an Apple iPhone

Apple’s Mark Perry will present closing argument allowing him to give Apple’s perspective on some of the questions that other attorneys will be asked by the judges during the afternoon. Most legal experts think Perry is simply going to replicate the same presentation Apple made in the lower court 14 months ago.

During that lawsuit, Apple CEO Tim Cook testified and said it would be wrong to allow developers to circumvent Apple’s in-app payment platform. The executive said this would weaken the security and privacy expected by consumers who buy an iPhone instead of an Android device. During his testimony, Cook said forcing Apple to redirect App Store users to third-party integrated payment platforms would create “a kind of toxic mess.”

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