By Andrew Chung
(Reuters) -The U.S. Supreme Court on Wednesday dealt a setback to Epic Games, maker of the popular video game “Fortnite,” in its legal battle against Apple (NASDAQ: AAPL), declining to let a federal judge’s injunction take effect that could force the iPhone maker to change payment practices in its lucrative App Store.
Liberal Justice Elena Kagan, acting for the Supreme Court, denied Epic’s request to lift a decision by the San Francisco-based 9th U.S. Circuit Court of Appeals that effectively delayed implementing an injunction issued by U.S. District Judge Yvonne Gonzalez Rogers (NYSE: ROG) barring certain App Store rules, while Apple pursues a Supreme Court appeal.
The 9th Circuit in April had upheld the injunction but in July put that decision on hold. Kagan handles emergency matters for the Supreme Court arising from a group of states including California.
Epic filed an antitrust lawsuit in 2020, accusing Apple of acting as an illegal monopolist by requiring consumers to get apps through its App Store and buy digital content inside an app using its own system – for which it charges up to a 30% commission.
Rogers in 2021 rejected Epic’s antitrust claims against Apple. But the judge found that Apple violated California’s unfair competition law by barring developers from “steering” users to make digital purchases that bypass Apple’s in-app system, which Epic could save them money with lower commissions.
The judge’s injunction required Apple to let app developers provide links and buttons that direct consumers to other ways to pay for digital content that they use in their apps.
In seeking to pause the injunction from taking effect while it readies an appeal to the Supreme Court, Apple told the 9th Circuit that Rogers had erred in prohibiting it from enforcing its rules against all app developers in the United States, rather than just Epic.
“Apple will be required to change its business model to comply with the injunction before judicial review has been completed,” the company told the 9th Circuit. “The undisputed evidence establishes that the injunction will limit Apple’s ability to protect users from fraud, scams, malware, spyware, and objectionable content.”
Epic told the Supreme Court that the 9th Circuit’s standard for putting cases on hold is “far too lenient.”