Apple has suffered another legal setback in its long-running fight with Epic Games after a US appeals court largely upheld a finding that the company defied court orders over its App Store payment rules.

In a ruling handed down on Friday (AEDT), the court rejected Apple’s appeal against an April contempt decision. The judge had found Apple “willfully” failed to comply with a 2021 injunction requiring it to let app developers link users to payment options outside Apple’s in-app purchase system.

The appeals court agreed that Apple undermined the spirit of that order by discouraging developers from using external payments.

Judges pointed to Apple’s introduction of a 27% fee on external purchases, limits on how links could be displayed, and full-screen warning messages shown to users before they left an app.

However, the decision was not an outright loss for Apple.

The three-judge panel ruled that Judge Gonzalez Rogers went too far when she banned Apple from collecting any commission at all on purchases made via external links.

The court said Apple is entitled to charge a “reasonable, non-prohibitive” fee tied to the costs of supporting external payment links, and sent the case back for the lower court to determine what that fee could be.

The panel also clarified that while Apple cannot force developers to make alternative payment options less appealing than Apple’s own, it can still set limits so external links are not more prominent than Apple’s in-app purchase buttons.

The case is a key test of Apple’s App Store business model, which takes a 15 to 30% cut of most digital transactions and generates billions of dollars annually.

Apple and Epic Games did not immediately comment. Epic CEO Tim Sweeney acknowledged the ruling on social media.