No stay for Apple to end rules against bypassing its commissions

A federal judge refused to suspend an order requiring Apple to end anticompetitive rules that prohibit developers from directing users to avenues that allow apps to bypass a commission on sales.

U.S. District Judge Yvonne Gonzalez Rogers decided Tuesday that staying her injunction would primarily benefit Apple to the detriment of developers and iPhone users. She wrote, "Consumer information, transparency, and consumer choice is in the interest of the public."

Apple said in a statement that it will ask the 9th U.S. Circuit Court of Appeals for a "stay based on these circumstances."

"Apple believes no additional business changes should be required to take effect until all appeals in this case are resolved," it said.

Epic Games, creator of online video game Fortnite, and its attorneys at Cravath, Swaine & Moore LLP declined to comment.

While she didn't find any violations of state or federal antitrust law, Gonzalez Rogers found that Apple's rules restricting communications about alternative payment options that don't go through its in-app payment system violate California's Unfair Competition Law. She enjoined the company from barring buttons or links in apps that inform consumers of payment methods in which developers aren't subject to a toll of up to 30%.

Apple moved for a stay until appeals filed by both sides are resolved.Epic Games v. Apple Inc., 20-cv-05640 (N.D. Cal., filed Aug. 13, 2020).

Gonzalez Rogers rejected arguments that implementing her order by Dec. 9 will interfere with Apple's ability to collect commissions, prevent fraudulent transactions and avert risks to privacy and security.

"That the injunction may require additional engineering or guidelines is not evidence of irreparable injury," she wrote. "Rather, at best, it only suggests that more time is needed to comply."

The judge noted that consumers are already "quite used to linking from an app to a web browser."

Gonzalez Rogers called Apple's motion "fundamentally flawed."

"Apple's motion is based on a selective reading of this court's findings and ignores all of the findings which supported the injunction, namely incipient antitrust conduct including supercompetitive commission rates resulting in extraordinarily high operating margins and which have not been correlated to the value of its intellectual property," she wrote.