OAKLAND, Calif. — A federal judge on Wednesday questioned whether Apple has set up a gauntlet of exasperating hurdles to discourage the use of alternative payment options in iPhone apps, despite a court order seeking to create more ways for consumers to pay for digital services.
The verbal sparring between Judge Yvonne Gonzalez Rogers and the head of Apple’s app store kicked off a hearing focused on whether Apple is still steering U.S. consumers to its once-exclusive app payment system in defiance of an injunction aimed at promoting more choices that could help lower prices.
Gonzalez Rogers’ order requires Apple to allow app developers to display links to other options besides the company’s own payment system in the U.S. Apple makes billions of dollars annually from that setup, which imposes commission ranging from 15% to 30% on digital transactions completed within the most popular iPhone apps.
Apple’s app store and its commission system also is being targeted in another antitrust case recently filed by the U.S. Justice Department in a case alleging the iPhone walls off competition in a variety of ways that stifle competition and innovation.
Gonzalez Rogers often sounded frustrated and skeptical as she periodically chimed in during four hours of testimony from Matthew Fischer, the Apple executive in charge of the iPhone app store.
The tone of the judge’s questions indicated she is concerned Apple’s efforts to comply with her order have been primarily designed to protect the company’s profits instead of making it easier for iPhone users to switch to other in-app payment options, as she intended.
Gonzalez Rogers was particularly pointed as she grilled Fischer about whether Apple had deliberately made it more cumbersome and confusing for consumers to make digital purchases through alternative services.
“Other than to stifle competition, I can see no other answer,” the judge said as she tried to dissect the rationale for Apple’s design of alternative payment option system for iPhone apps.
Fischer maintained Apple is complying with the judge’s order while still trying to shield iPhone users from bad actors on the internet and enabling the Cupertino, California, company to reap a return on its investments in the app store and other mobile software.
Toward that end, Apple has introduced a new commission structure ranging from 12% to 27% on digital transactions initiated from within an app and completed on an alternative payment option. After Gonzalez Rogers…
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