Meta And Microsoft Criticize Apple For Allegedly Evading Legal Requirements Post-Epic Games Ruling

Apple Inc AAPL is facing criticism from tech giants Meta Platforms Inc META and Microsoft Corp MSFT over its compliance plan in the ongoing legal battle with Epic Games.

What Happened: Apple’s compliance with a 2021 order from a California federal judge, which prohibits the tech giant from restricting app developers from using external payment options, has been deemed inadequate by Meta, Microsoft, and other companies, reported The Verge on Wednesday.

Epic and other developers have been dissatisfied with Apple’s 15% to 30% fees on in-app purchases. Apple’s restrictions on directing users to lower-priced payment options outside the iOS ecosystem have also been frustrating.

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The companies wrote in their brief, "Apple's new restrictions are plainly designed to render alternatives to Apple's IAP impractical for developers and inaccessible and unappealing to consumers, thus circumventing both the spirit and underlying goals of the injunction." 

The amici argues that Apple’s 12% to 27% fee on external purchases undermines the new requirement’s intent, as it offers only a marginal reduction compared to what developers would pay for in-app purchases.

This fee for external purchases might render it impractical for developers to establish such payment systems, especially considering additional transaction costs that could nullify the 3% savings from moving away from Apple’s system. Furthermore, customers are unlikely to opt for the external option if it entails the same or higher prices.

Why It Matters: This development comes on the heels of Apple’s recent actions in the European Union. In February, the company announced changes to its App Store to support alternative app stores in the EU.

However, these changes have been met with skepticism, with Apple’s Phil Schiller warning of potential privacy threats.

In March, Apple terminated Epic Games’ developer account, preventing the introduction of the Epic Games Store and Fortnite on iOS devices in Europe. Epic Games condemned this move as violating the Digital Markets Act (DMA).

Apple’s compliance plan in the Epic case is a crucial issue that could significantly impact the company’s future dealings with developers and regulators.

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