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Epic Games claims Apple violated court order with alternative fees

Pictured: Alap Naik Desai
By Alap Naik Desai
April 15, 2024
Featured image for Epic Games claims Apple violated court order with alternative fees

Apple is sneakily violating a court’s order that mandates the iPhone maker must allow alternative payment methods, Epic Games has claimed. The Fortnite developer called on a federal judge to hold Apple in contempt of court.

As expected, Apple has reportedly requested the court to squash Epic Games’ request. The company has claimed that it hasn’t violated any order. Apple is accusing Epic Games of trying to “micromanage” its business.

Apple legally complied with the court’s orders but still had its way

Epic Games has been fighting a long-winded battle with Apple. The Fortnite developer wants Apple to allow third-party payment platforms inside the App Store’s walled garden.

Simply put, Epic Games wants to avoid the hefty “Apple Tax”, which starts from 15% but is often 30% on most transactions that take place inside the App Store. Needless to add, Apple insists all transactions must take place through its payment mechanisms.

Back in 2021, Epic Games managed a marginal win, when a US Federal Court sided with the company on one of its ten grudges. The court had ordered Apple to allow direct and alternative payment systems in the App Store. The company was essentially barred from stopping companies that wanted to offer their customers alternative payment methods.

Apple came up with a seemingly devious solution. The iPhone maker has allowed links to third-party payment platforms. However, developers must first apply for an ‘entitlement’ before they can insert these links in their apps. Moreover, Apple restricts app and game developers to just one link that they can display in the app, and one on the App Store page.

Apple has a “Small Business Program”, for developers whose revenue is less than a million dollars per year. A vast majority of developers qualifying for this program will have to pay a 12% commission on digital purchases that “take place on the developer’s website within seven days after a user taps through an External Purchase Link.” The same applies to developers who offer subscriptions through their apps.

Epic Games claims Apple’s solutions are “commercially unusable”

If the above conditions aren’t sneaky enough, Apple claims 27% of any revenue from purchases made through these links. Needless to say, these loopholes try to ensure Apple continues to make close to its traditional 30% “Apple Tax”.

Epic Games is fighting these conditions and the resultant continued existence of the hefty Apple Tax. The company reportedly claimed in a court filing last month that Apple was in “blatant violation” of the court’s injunction.

Epic Games is suggesting Apple’s 27% commission makes links for alternative payment options “commercially unusable” and hence, “entirely useless.” The company has requested the court to hold Apple in contempt.

As always, Apple insists the entitlement condition ensures users “enjoy a safe and secure iOS experience.” In other words, Apple suggests these safeguards and conditions are necessary to, “maintain a safe, secure, and efficient ecosystem.”

It is interesting to note that Microsoft, Meta, X, and Match have reportedly filed their support, in unison, for Epic’s legal cause.

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