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Update:
- The U.S. Supreme Court denied Apple’s request to review an appeals court ruling blocking its rule that stops iOS app developers from sending customers to payments outside Apple.
- The court also denied an appeal from Epic seeking review of findings that Apple’s policies did not violate the Sherman Act.
- The Supreme Court order did not explain the denial.
- “The court battle to open iOS to competing stores and payments is lost in the United States,” Epic CEO Tim Sweeney writes on social media. “A sad outcome for all developers.”
- Developers can now include links or buttons to direct customers to other payment options, Sweeney notes, and can tell customers about better prices outside of the Apple payment method.
Apple Epic Games lawsuit overview:
- Who: Apple has largely beaten a lawsuit brought by Fortnite developer Epic Games after a federal judge issued a ruling.
- What: Epic alleged that Apple was violating antitrust and anticompetition laws in its alleged iron-clad grip of app store payment options.
- Where: The ruling was issued in a California federal court.
(Sept. 14, 2021)
Apple has come out of an antitrust lawsuit with developer Epic Games mostly victorious, with a California federal judge ruling that Epic had failed to prove the tech giant was an illegal monopolist.
However, U.S. District Judge Yvonne Gonzalez Rogers ruled Apple had created the prospect of an “incipient” and unjustified competition law violation by stopping consumers from accessing payment options other than those in-app, forcing developers, like Epic Games, to pick up the 30 percent commission charged by Apple’s app store.
Apple Epic Games lawsuit goes further than recent settlement
Apple prohibits app developers from steering consumers to alternative payment options, the company had artificially increased its market power by stopping developers communicating lower prices on other platforms, Judge Gonzalez Rogers said.
She ordered an injunction on the anti-steering rules, which goes much further than Apple’s recent settlement with a group of app developers in which the company would permit developers to talk to consumers outside of the app.
Judge Gonzalez Rogers said that overall Epic had overreached in its antitrust claims, “as a consequence, the trial record was not as fulsome with respect to antitrust conduct in the relevant market as it could have been.”
Despite that, Judge Gonzalez Rogers said in her ruling that the court did not find it impossible that Apple was a monopolist, only that Epic Games “failed in its burden to demonstrate Apple is an illegal monopolist.”
“Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market.”
Epic Games ordered to pay Apple
Indeed, the judge concluded that Epic Games was liable for Apple’s breach of contract counterclaims for failing to meet Apple’s in-app purchase commissions and offering consumers an end-run around the in-app purchasing mechanism.
For that, Apple could claim 30 percent of Epic’s $12.2 million Fortnite earnings dating from August to October 2020, and 30 percent of revenue earned from Nov. 1 to the date of judgement.
Do you think Apple app developers trying to sell games through the App Store deserve more? Let us know your thoughts in the comments section!
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