On the eve of the iPhone 13 launch, we’ve finally been handed a ruling in the lawsuit filed by Epic Games last year. Epic Games, the developer of Fortnite, sued Apple last year over claims the company was violating U.S. antitrust law by prohibiting developers from implementing alternative in-app purchase methods. Today, Judge Yvonne Gonzalez-Rogers issued her ruling in the Epic Games v. Apple lawsuit, handing app developers a major win in the fight for app payment freedom.
As part of her ruling, Judge Gonzalez-Rogers issued a permanent injunction against Apple that orders the company to lift its restrictions on iOS apps and App Store pages providing buttons, external links, and other “calls to action” that direct consumers to other purchasing mechanisms. The injunction essentially orders Apple to abandon its anti-steering policy, which prohibited app developers from informing users of alternative purchasing methods.
Apple wins on all but one important claim
Last year, Epic Games intentionally circumvented Apple’s App Store policy by introducing direct payments for in-app purchases in Fortnite. Immediately after, Apple pulled Fortnite from the App Store and suspended Epic’s developer account, citing a violation of the App Store guidelines regarding in-app payments. When Epic sued Apple in response, they sought to have the latter reinstate their developer account so they could re-release Fortnite on iOS. Apple argued that Fortnite and Epic’s developer account should not be restored as Epic intentionally breached the contract between the two companies (a contract that, of course, Epic argues is illegal.)
However, Judge Gonzalez-Rogers today ruled in favor of Apple on its counterclaim of breach of contract. “Apple’s termination of the DPLA and the related agreements between Epic Games and Apple was valid, lawful, and enforceable,” said the Judge in her ruling. Because of this, it’s unlikely Apple will ever reinstate Fortnite or Epic’s developer account, because they were found to be correct in suspending them in the first place. The Judge also ordered Epic to pay 30% the revenue the company collected from Fortnite on iOS through Epic Direct Payment since it was implemented.
The Court also ruled that Epic Games “failed in its burden to demonstrate Apple is an illegal monopolist” in the narrowly-defined “digital mobile gaming transactions” market rather than both parties’ definition of the relevant market. The market in question is a $100 billion industry, and while Apple “enjoys considerable market share of over 55% and extraordinarily high profit margins,” Epic failed to prove to the Court that Apple’s behavior violated antitrust law. “Success is not illegal,” said Judge Gonzalez-Rogers in her ruling.
First the judge says it was wrong to force developers to pay exclusively through Apple, then says there were other options and Apple isn’t a monopoly and then says but you have to pay Apple a 30% cut of what you made through your other payment channel. What was this judge smoking?