A judge has made a decision in the year-long court case between Apple and Epic Games, with neither side appearing happy with the outcome.
The lawsuit started after Epic began offering in-app currency in its highly popular game Fortnite, also called V-bucks, at a discount if purchased through its own store instead of thought Apple’s App Store.
The move led to Apple removing Epic titles from the iOS App Store. This in turn led to Epic suing Apple in a far-reaching lawsuit.
There were no major points of contention – whether or not Epic, and by extension other app developers, could remain on Apple’s App Store and direct users to make purchases on other platforms, and perhaps more importantly, whether Apple was acting as a monopoly, as Epic claimed.
Now, according to a California court, Apple can no longer prevent app developers from directing their users to third-party payment systems.
Epic’s argument was that Apple was preventing it from communicating with its customers and notifying them of cheaper ways to make in-app purchases. Apple had previously claimed that apps on its platform should only allow users to make in-app purchases through Apple’s store.
As such, the court hit Apple with a permanent injunction against stopping developers from linking to their own purchasing systems.
However, Epic Games failed to prove that Apple was acting as a monopoly. According to Judge Yvonne Gonzalez-Rogers: “The court cannot ultimately conclude that Apple is a monopolist.”
According to her: “Apple enjoys considerable market share of over 55% and extraordinary high profit margins, these factors alone do not show antitrust conduct. 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. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist,” she added.
Epic Vs Apple
However, while stopping short of calling Apple a monopoly, the decision did say that the company has acted anti-competitively. The decision pointed to Apple’s anti-steering provisions, which hid critical information from consumers.
Apple was ordered to pay Epic 30% of the more than $12m it made through the direct payment system it introduced on the iOS version of Fortnite between August 2020 and October 2020. In addition, it will need to pay 30% of any revenue it collected from November 1, 2020 through the date of judgment.
However, the ruling said that Apple’s decision to terminate its agreement with Epic was valid, meaning that Apple can decide whether it will reinstate the company’s developer account on the App Store.
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It remains to be seen how Epic’s victory for in-app purchases will affect Apple. The tech giant takes a 15-30% cut of in-app purchases made on its platform. If enough people make purchases on other platforms, which could offer lower prices if they don’t have to factor in Apple’s cut, it could take away a sizable amount of money from Apple.
While Apple CEO Tim Cook claimed during the trial to be unaware of how much the company generates from the App Store, during the case, it was revealed that gaming apps account from 70% of Apple’s App Store revenue.
In addition, the decision allows Apple to continue taking its cut on purchases made through its app.
Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.
— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
In addition to the Apple case, Epic is pursuing similar legal action against Google and it’s Play Store.
Epic has since launched an appeal against the decision, with Apple saying it has not ruled out making its own one.