Several years ago, a federal judge in California issued a permanent injunction against Apple in the highly publicized lawsuit brought by Epic Games. That 2021 injunction was designed to put an end to Apple's "anti-steering" policy which, in essence, required IOS apps to execute in-app transactions within the App Store, triggering a 30% commission to Apple for those transactions. The injunction was intended to finally allow IOS developers send their customers out of the walled garden that is the App Store and, therefore, cut out a very expensive middleman.
The 2021 injunction instructed Apple to stop "prohibiting developers from (i) including in their apps and their metadata buttons external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing, and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app." In other words, the injunction allowed developers to tell their App Store customers to visit the developer's app or website where they could buy the same item for less.
Last month, the same federal judge held Apple in civil contempt for violating the permanent injunction. Judge Yvonne Gonzalez Rogers found that "Apple willfully chose not to comply with this Court's injunction," and referred Apple for criminal investigation because at least one of its executives "lied under oath." In short, while Apple now allows "linked-out purchases," until recently it charged a 27% commission on many of those purchases, including any purchase made within seven days after a user taps through an external purchase link. Apple also placed restrictions on link placement and designs to prevent users from linking out. For example, a developer couldn't advertise or place a link to its own store in its IOS item shop. Apple also prohibited certain colors of link-out buttons to make them less visually appealing, and added "scare screens" to suggest that third party sites may not be secure ("Are you sure you want to continue?").
The Court's recent contempt order bars Apple from taking these aggressive actions to prevent linked-out purchases. The order bars Apple from charging any commissions on linked-out purchases; imposing restrictions or conditions on "developers' style, language, formatting, quantity, flow or placement of links for purchases outside an app;" limiting the use of buttons or other calls to action; interfering with customers' choice "by using anything other than a neutral message apprising users that they are going to a third-party site;" and restricting developers' use of dynamic links that pass on product or user details.
If your business offers an IOS app that allows for in-app transactions, our litigation and IP departments are happy to assist you with any questions you may have about the impact of this ruling.
Resources
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
