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News: U.S. Federal Judge and Epic Games contest whether Apple is Compliant with the Order that allows Payment Steering --

May 16, 2024

An evidentiary hearing in the Epic Games v. Apple case will determine whether Apple actually complies with U.S. District Judge Yvonne Gonzalez Rogers' order which allowed app developers to "steer" users towards other payment services outside the App Store's native App Store.

The trial on the subsequent compliance of Apple began on Wednesday, the 8th of May. AP is reporting the judge Gonzalez Rogers " questioned whether Apple puts up with an avalanche of obstacles to prevent users from using different payment options inside iPhone applications," in spite of the court's order.

Hearings was focused on the question of the question of Apple Policy is Still anti-steering

The AP piece further notes that Judge Gonzalez Rogers' tone suggested Apple's implementation has primarily focussed in maximizing profits for Apple instead of achieving the purpose of her decision, which is to allow steering, and enhance iPhone users' capacity to easily switch to other in-app payment options. This article explains that, according the Epic reports, Apple is still blocking developers from steering customers to alternative payment methods that offer lower prices.

The AP article goes on to state that, during the hearing, the Apple chief executive in charge of the iPhone App Store, Matthew Fischer stated that Apple has only accepted and approved applications for 38 apps that show hyperlinks to payment platforms, "a fraction of the approximately 2 million iPhone apps that are available across the U.S."

PC Mag points out that this is a low number of applications 38 of the 65,000 developers who offer In-App purchases, most likely due to the expense due to the 27% Apple cost and the added cost of fees for credit cards will likely result in an overall cost that is higher for app creators.

Apple Executive 'Unaware' of the cost increase problem

The LAW360 piece on the 10th of May, 2015 details the incident as Epic lawyer Yonatan Even and judge Gonzalez Rogers questioned Apple Finance Vice President Alex Roman. Even stressed the less expensive cost of 3% charged by Apple -27 percent for transactions made outside the app on Apple devices, as opposed to its usual in-app $30 fee as well as Epic added evidence to show that the typical cost of payments in the U.S. is 3.5% which includes a yoga application CEO stating that users pay 3.5 percent to 6.5 percent for fees related to payments processing. After Roman claimed that he wasn't aware of this, Even reiterated that the objective was to determine an amount which allowed businesses to offer users lower price. They demanded Roman if he understood this. A judge Gonzalez Rogers is quoted as declaring to Roman that "'It appears you made many decisions without information,' she stated. "It is as if you were trying to preserve ... your income that you had in the past.'" Access the LAW360 article here.

We are pleased to see The Judge's View together with Epic

The CEO David Nachman states that "We're pleased to see the judge side with Epic in this exchange We're hopeful that we can persuade the judge to convince Apple to allow steering to be accessible to app and game developers with no fees or limitations. The goal is to facilitate for worldwide commerce in software, as well as digital product firms. We're sharing our clients in celebrating the progress towards free commerce on mobile."

Additional Antitrust Action against Apple launched by US Justice Department

Additionally, in addition in addition to Epic Games case, the U.S. Justice Department launched an antitrust lawsuit against Apple during the month of March 2024 and claims that Apple is the sole monopoly in the mobile industry which includes (among other things) in relation to electronic payment.

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