Apple denied Supreme Court bailout from sanctions in Epic app store fight

WASHINGTON (CN) — Justice Elena Kagan refused on Wednesday to put a battle royale over anticompetitive practices on pause after Apple warned upcoming hearings could reshape the global app market.

The Barack Obama appointee did not explain her decision or refer the tech giant's emergency application to the full court for consideration.

Apple 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.

On Monday, the company asked to pause upcoming hearings on a reasonable commission rate until the justices determine whether the sanctions are warranted.

Epic Games pushed back against the request, framing it as just the latest in a long line of evasion and delay tactics.

"Apple's willful contempt has successfully delayed the restoration of competition by more than two years, allowing it to reap billions of dollars in what the Ninth Circuit previously affirmed were supracompetitive fees," the company wrote in a brief opposing Apple's request.

Before Epic Games brought its antitrust lawsuit, there had been no way to make app purchases with an 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.

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 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.

Epic Games conceded that the Supreme Court should consider Apple's application as a petition for certiorari, giving the entire court an opportunity to weigh in on the case. The game developer said it would file a response to Apple's merits arguments in the next 30 days.

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.