Dive Brief:
- Epic Games CEO Tim Sweeney said Tuesday he will go back to court against tech giant Apple. Sweeney’s statement came the same day Apple filed court documents outlining how it would allow app developers to accept payments outside of its own in-app payment system.
- Cupertino, California-based Apple plans to charge a fee of between 12% and 27% for each payment that uses an external purchase link, as opposed to the 15% to 30% it charges for payments through its own system, according to a support page.
- Sweeney called Apple’s proposal a “bad-faith compliance plan,” in a post on X, formerly Twitter. The CEO contended developers would not be able to offer users a discount based on Apple’s fees. “Epic will contest Apple's bad-faith compliance plan in District Court,” he said in the post on X.
Dive Insight:
In his post on X, Sweeney detailed his concerns about Apple’s new plan for outside payments. He said that Apple’s planned 27% fee would inhibit offering lower prices to consumers. “Apple has never done this before, and it kills price competition,” he said.
The Epic CEO also said that Apple mandated all the designs for how an app would direct a user to an external payment and that the design flow would make it difficult for users to find and complete external payments. Even if the user were to complete the flow, Apple would then put up a “scare screen” before the user could complete the transaction, Sweeney said.
In its court filing, Apple said it’s seeking to protect app users with the proposed plan. And that users would be losing out on protections afforded by its own payment system. “These requirements are designed to minimize fraud, scams, and confusion,” it said in the filing. In the support documentation, the company said customers would not receive support from it if there were disputes over external payments. “Apple will not be able to assist customers with refunds, purchase history, subscription management, and other issues,” it said.
But Consumer Reports Senior Researcher Sumit Sharma was not convinced by Apple’s argument that it was protecting consumers. “It's very paternalistic of Apple to claim that it’s the only company that cares about security [and] privacy of consumers,” Sharma said. He added that companies like The New York Times have an incentive to provide a good experience to subscribers and can do so without Apple in the middle.
Cary, North Carolina-based Epic Games had originally sued Apple in a federal court in California’s northern district in 2021. After the judge ruled mostly in Apple’s favor, Epic appealed that ruling to the San Francisco-based 9th U.S. Circuit Court of Appeals. Both Apple and Epic appealed the second ruling to the Supreme Court last July, but on Tuesday the justices declined to hear the case, according to a report by Reuters.
Epic fared better in a similar trial against tech giant Google last November in a U.S. Court in San Francisco. There, a jury decided in favor of Epic on all counts. Google has said it will appeal the decision.
Shortly after the Google-Epic trial, a bipartisan group of state attorneys general announced a settlement with Google over antitrust charges. The settlement required the tech giant to allow app developers to bypass Google’s payment processing for a minimum of five years.
Apple may soon face similar legal pressure from the U.S. government. The U.S. Department of Justice may file an antitrust case as early as March against Apple, according to a report from Bloomberg. The department’s case could take aim at Apple’s payments system for the iPhone and Apple’s practice of taking a cut of purchases made inside apps.
A spokesperson for Epic Games referred to Sweeney’s post on X when asked for comment on the CEO’s plan to challenge Apple’s new developer guidelines. Apple did not immediately respond to requests for comment on Sweeney’s posts.
