Apple Accused of Manipulating App Store Rules by Microsoft and Meta

Tech Giants Accuse Apple of Circumventing Court Order in Epic Games Trial

Several major tech companies, including Meta, Microsoft, Match Group, and X, have filed a brief with a California federal court, alleging that Apple is not adhering to the spirit or letter of an order issued by the judge in its trial against Epic Games. The order required Apple to allow app developers to use “buttons, external links, or other calls to action” to inform users about payment options outside of their apps.

Developers’ Grievances with Apple’s App Store Fees

Epic Games and other developers have long taken issue with Apple’s 15 to 30 percent fees on in-app purchases, which are difficult to avoid due to Apple’s restrictions on directing users to lower-priced payment options outside the iOS ecosystem. While Apple defends these fees as reasonable compensation for its App Store services, the companies filing the brief argue that Apple’s proposed compliance measures do not adequately address the problem.

Apple’s Complex and Burdensome Compliance Proposal

According to the brief, Apple’s proposal to allow developers to include an external purchase link is both complex and burdensome, effectively rendering alternatives to Apple’s in-app purchase (IAP) system impractical for developers and unappealing to consumers. The companies argue that this circumvents the goals and spirit of the court’s injunction.

Apple’s new restrictions are plainly designed to render alternatives to Apple’s IAP impractical for developers, and inaccessible and unappealing to consumers, thus circumventing both the spirit and underlying goals of the injunction.

Epic Games Seeks Enforcement of Original Order

Epic Games has asked the judge to enforce her original order, claiming that Apple is in “blatant violation” of the injunction. The involvement of other large developers like Meta and Microsoft highlights the far-reaching impact of Apple’s rules, even on the largest tech companies.

Apple’s External Purchase Fee Defeats the Purpose

The amici argue that Apple’s 12 to 27 percent fee on external purchases undermines the purpose of the new requirement, as it is only marginally lower than the fee for in-app purchases. This fee could make it unrealistic for developers to set up an external payments system, as additional transaction costs might negate the 3 percent savings gained by moving away from Apple’s system. Furthermore, customers are unlikely to choose the external option if the price is the same or higher.

Impact on Meta’s Advertising Feature

Meta explains that Apple’s decision in 2022 to require Meta to pay the IAP fee for its product that allows advertisers to boost posts within their apps has increased the cost of using the feature. This would not be the case if Meta could direct users to its own payment options.

Apple’s Response and Upcoming Hearing

In response to the amicus brief, Apple maintains that it has fully complied with the injunction as of January 16th, 2023. The company argues that the requirements for external payment links are necessary to protect user privacy, security, and the integrity of the iOS ecosystem. A hearing to enforce the injunction is scheduled for April 30th, where Apple will have the opportunity to file a response.