Apple asks Supreme Court to referee Epic app store fight

WASHINGTON (CN) — Apple asked the Supreme Court on Monday to drop in on a battle royale with Epic Games over anticompetitive practices on its app store.

The tech giant was held in contempt for pocketing a hefty commission on purchases made through external links that it was forced to allow thanks to a lawsuit from Epic Games, maker of the popular video game Fortnite.

Apple asked the Supreme Court for emergency relief to pause upcoming hearings on a reasonable commission rate, however, until the justices determine whether the sanctions are warranted.

"A stay is now needed before Apple is forced to litigate its commission rate under an erroneous and prejudicial contempt label — in proceedings that could reshape the global app market — before this court can consider whether to grant review," Apple wrote.

Epic Games CEO Tim Sweeney said Apple had thrown a grenade into the world app market by saying the quiet part out loud.

"This confirms that Apple's ongoing 5 years of stall tactics in the U.S. court system — leading to the contempt of court finding against them and the criminal referral for giving false testimony — is plainly aimed at stalling worldwide relief for developers and consumers," Sweeney wrote on X.

Sweeney said Apple's claims were a direct attack on domestic and international regulators.

"Apple must be stopped," Sweeney wrote. "Regulators and law enforcers need to see this and get off the sidelines."

Before Epic Games brought its antitrust lawsuit against Apple, there had been no way to make app purchases with an iPhone or other Apple device other than through Apple's app store. In 2021, a judge ruled that Apple's policies violated California's competition law and ordered the company to allow app developers more freedom in giving users access to other payment options.

After the ruling, the app store began allowing developers to communicate with users via email or otherwise about alternative purchasing methods. Apple also opened up buttons and external links, directing users to alternative purchasing mechanisms.

However, Apple implemented a commission fee of between 12% and 27% on linked-out purchases. The tech giant says its solution ensures that Apple can continue to receive compensation for use of its IP-protected tools, technology and services.

"For example, if an app user wants to acquire a virtual costume (a 'skin,' in Fortnite parlance) for their virtual character, they can now do so using an external link to Epic's own purchasing system," Apple wrote. "But Epic cannot deliver that skin without the iPhone screen that displays it, the iPhone touch controls that direct the virtual character, the Apple silicon chip that processes all iOS software, the app development tools Epic used to build Fortnite for iOS and the App Store platform that downloads, updates and maintains the app."

A trial judge held Apple in contempt, finding that tacking fees onto linked-out purchases violated the "spirit" of the court's relief. An appeals court upheld the sanctions, finding that the 27% commission on those transactions was large enough that no rational developer would offer them.

The appellate panel also agreed that Apple's "scare screen" violated the injunction by discouraging consumers from making purchases other than through its own app store.

Before users could use an external purchase link, they would be warned in large, bold font that they were about to go to an external website and that Apple is not responsible for the privacy or security of purchases made on the web.

The panel, however, reversed one of the trial judge's contempt sanctions that had ordered Apple not to charge any commission on purchases consumers make on a developer's website, saying that this was more like a punitive, criminal contempt sanction.

Apple said the Supreme Court needed to review the decision before additional proceedings can begin on remand.

"It is fundamentally unjust to require Apple to undergo high-stakes remand proceedings to determine a core facet of its business model under the false auspices that it acted in contempt by charging a commission," Apple wrote.

The tech giant tempered its request before the high court, agreeing not to charge a commission while its petition is pending.

"All Apple seeks here is a stay of the mandate so this court can consider Apple's petition before it is subjected to a remand proceeding that could reshape the global app market based on the false premise that Apple engaged in civil contempt," Apple wrote.

In 2023, the Supreme Court agreed to pause app store changes while the litigation proceeded. But a year later, the justices refused to review the merits of the underlying ruling that Apple faces sanctions for violating.

Last year, the high court rejected an emergency appeal from Google to delay a redesign of its app store after losing a similar case from Epic Games.