• by Wendy Davis  @wendyndavis, October 31, 2023

Forcing Apple to allow mobile app developers to offer in-app links to payment platforms could jeopardize the availability of free apps, tech industry groups told the Supreme Court this week.

The groups are urging the Supreme Court to review an injunction that would prevent Apple from enforcing its long-standing anti-steering policies, which prohibit app developers from offering in-app links to any payment options other than Apple's.

“If Apple ... cannot enforce anti-steering rules for in-app purchases, app developers will seek alternative payment processors charging lower fees and cutting Apple out of the transaction entirely,” NetChoice and Chamber of Progress argue in a friend-of-the-court brief filed this week with the Supreme Court.

“For continued viability of app platforms’ business models, Apple might have to start charging developers for the initial, formerly free, download of the developers’ app,” the groups add. “As a result, developers would now bear higher deployment costs and would need to either discourage downloads or they would need to charge users for downloads.”

The filing comes in an antitrust battle dating to 2020 between Apple and Fortnite developer Epic Games.

The dispute centered on a then-existing Apple policy that required developers to use its payment platform for in-app purchases. The company also charged a commission of up to 30% on those sales. (In 2021, Apple agreed to allow developers to notify app users by email or telephone -- but not in-app -- about outside payment options.)

In the summer of 2020, Epic said it would allow gamers to make purchases directly from it, in violation of Apple's policy at the time. Apple then removed Fortnite from the iOS app store, following which Epic sued Apple for allegedly monopolizing the iOS distribution market.

U.S. District Court Judge Yvonne Gonzalez Rogers in Oakland, California ruled in 2021 that Epic failed to prove its antitrust claims. But she also ruled that Apple's anti-steering policy violated California's unfair competition law, and issued an injunction requiring Apple to allow developers to add in-app links to payment options outside Apple's platform.

Both Apple and Epic appealed to the 9th Circuit, which upheld Rogers' order but stayed the injunction while both sides seek review by the Supreme Court.

In September, Apple and Epic each asked the Supreme Court to review Rogers' ruling.

NetChoice and Chamber of Progress say in their friend-of-the-court brief that Apple's anti-steering rules “are an essential source of funding” for services provided by Apple's App Store -- including advertising, development resources and review mechanisms.

“The freemium model, which enables users to try out products without an initial purchase, has come to dominate cellphone-based app sales,” the groups contend. “But the freemium model cannot exist without anti-steering provisions as there would be no incentive for platforms to host non-monetizable apps.”

Apple and Epic are expected to file a new round of written arguments by the beginning of next month.