Apple Loses Appeals Court Ruling in App Store Fight With Epic

A federal appeals court sided with Epic Games Inc. in its long-running dispute with Apple Inc., upholding a lower-court contempt ruling against the iPhone maker and directing a judge to decide what commission the company can charge developers on transactions that are made outside of the App Store.

In the 54-page ruling on Thursday, the 9th US Circuit Court of Appeals in San Francisco ruled that Apple violated a lower court’s injunction by imposing a 27% fee on transactions and affirmed US District Judge Yvonne Gonzalez Rogers’ decision to hold the company in contempt. But the three-judge panel said Gonzalez Rogers should reconsider what commission Apple can charge developers for use of its intellectual property.

“Apple is entitled to some compensation for the use of its intellectual property that is directly used in permitting Epic and others to consummate linked-out purchases,” the court said.

The companies have sparred for more than five years after Epic accused Apple of illegally blocking competition to its App Store. Rogers ruled in April that Apple deliberately flouted her 2021 order to allow developers to direct consumers to cheaper payment options online. Apple takes a 15% to 30% cut of most in-app purchases, which has long angered developers.

To contact the reporters on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net;
Josh Sisco in San Francisco at jsisco6@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Blumberg

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