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Apple granted stay in Epic lawsuit ruling

Apple can breathe a sigh of temporary relief as an appeals court has granted a stay in a portion of the judgment handed to it in the lawsuit brought by Epic Games. The ruling mandated Apple to allow third-party payment methods in its apps.

With the stay granted, Apple does not have to update its IAP until the outcome of its appeal on the judgment. This could take months as the appeal is yet to be considered.

Previously, Judge Yvonne Gonzalez had ordered Apple to make changes to its policies that will allow app developers to use their preferred payment method outside of Apple. The judge imposed a December deadline for Apple to make the changes.

The ruling made it illegal for Apple to ban buttons or external links that inform users of other payment methods, an action expressly forbidden under Apple’s app store terms and conditions.

“Apple has demonstrated, at minimum, that its appeal raises serious questions on the merits of the district court’s determination,” the ruling says. “Therefore, we grant Apple’s motion to stay part (i) of paragraph (1) of the permanent injunction. The stay will remain in effect until the mandate issues in this appeal.”

The ban on allowing third-party payment in iOS apps has rankled developers for years, but many prefer not to speak out for fear of retribution. The problem with the policy is related to Apple’s cut on all revenues passing through the app store, which adds significantly to developer expenses as it could be up to 30 percent.

Apple takes a cut of subscriptions too, on services like streaming and in-game revenue. This creates a problem for apps that competes with Apple as they either have to put a markup on their subscription price, which makes them less competitive than Apple services or absorb the cut, which means less profits for the developers.

Epic Games brought a lawsuit against Apple when its game was removed from the App Store. The game maker had included an external link for payment in its popular Fortnite game.

In a statement, Apple expressed appreciation for the stay granted by the court:

“We’re constantly evolving the App Store to help create an even better experience for our users and the incredibly talented community of iOS developers. Our concern is that these changes would have created new privacy and security risks, and disrupted the user experience customers love about the App Store. We want to thank the court for granting this stay while the appeals process continues.”

Apple had defended its no-external payment policy by citing security as it could not guarantee user safety if they choose to pay outside of Apple’s ecosystem. The electronics giant bills itself as a privacy advocate and thus limits payments to its approved channel.

The App Store has become a lucrative business for Apple, which continues to see a rise in its revenue from its services division.

As part of the reason for applying for a stay, Apple had cited the difficulty of updating its APIs to comply with the judge’s ruling, as it has to account for parental controls. The company had also indicated it plans to take a cut from payments made outside the app as well, which the court ruling does not prevent it from doing. However, Apple will have to find a way to track the external payments to be able to take its cut.

It should be noted that this decision does not reverse the ruling. Similarly, the stay does not cover the second part of the ruling, which addressed developers reaching out to the app user externally to Apple’s ecosystem. Apple was ordered to permit “communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”

Written by HackerVibes

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