Apple App Store Decision Marks a Win for iPhone Users, but Shows Need for Broader ReformSeptember 10, 2021
Last year, Epic Games sued Apple, arguing — among other things — that its restrictions on app store payments for digital goods were anticompetitive. Today, Judge Yvonne Gonzalez-Rogers of the United States District Court for the Northern District of California ruled partly in Epic’s favor. Public Knowledge argues that this win for users also demonstrates the need for federal legislation to address anticompetitive abuses in the digital economy.
The following can be attributed to John Bergmayer, Legal Director at Public Knowledge:
“After thorough consideration of a lengthy and complex factual record, Judge Yvonne Gonzalez-Rogers has ordered Apple to stop its anticompetitive practice of restricting what kinds of payment options developers can include in their apps. This is good for developers, but more importantly, for iPhone users. If these prohibitions stay in place, users can expect a more vibrant and competitive app economy.
“This injunction goes into effect in 90 days, and the decision is likely to be appealed by both parties on numerous points. Notably, Judge Gonzalez-Rogers found that Apple violated California competition law, but not federal antitrust law. If upheld, this finding marks another strong indication that we need to reform antitrust laws to cover the kinds of anticompetitive conduct that have become prevalent in the digital age, and that we need new laws and rules focused on dominant digital platforms like Apple.
“More broadly, the legal and regulatory actions taken around the world and in the United States show that issues around competition and app stores cannot be resolved by just one court case that binds just one defendant. For example, Google is also being sued, and is under investigation, for similar practices. This is why Public Knowledge has endorsed and will continue to fight for legislation like the ‘Stronger Online Economy’ package and the ‘Open App Markets Act,’ introduced by Senators Blumenthal (D-CT), Blackburn (R-TN), and Klobuchar (D-MN), that would address a wider range of practices and apply to any dominant mobile app store.
“Public Knowledge appreciates the way that Apple takes the security and privacy of its users into account when designing iPhones and iOS. But apps that sell physical goods and services already provide their own payment systems, and nothing about allowing similar competition on the digital side will require Apple to sacrifice any of those important goals.”
View our recent paper, “Tending the Garden: How to Ensure that App Stores Put Users First,” to learn more about the app marketplace and how platform competition alone cannot ensure that app stores will promote the public interest.