Apple Largely Prevails in Appeal of Epic Games’ App Store Lawsuit
A federal appeals court ruled on Monday that Apple does not have a monopoly in the mobile games market, siding with a lower court’s 2021 ruling that largely gave the tech giant a victory in a lawsuit brought by Epic Games.
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled 2 to 1 that Apple’s tight control of its App Store did not violate federal antitrust law. Some app developers have said the multibillion-dollar business’s strict policies stifle competition and eat into their profits.
“There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power,” the judges wrote in their 91-page decision, which largely maintained the status quo. “Our job as a federal Court of Appeals, however, is not to resolve that debate — nor could we even attempt to do so.”
While siding with Apple on a majority of Epic’s claims, the judges also agreed with the lower court that Apple was violating California’s Unfair Competition Law by prohibiting app developers from directing their customers to payment methods outside the App Store, which charges a 30 percent fee. Apple suggested that it could further appeal that ruling.
If the decision remains in place, app developers that sell subscriptions or digital services on an iPhone app could be allowed to steer their customers to outside websites to complete their purchases and avoid Apple’s fee.
“Today’s decision reaffirms Apple’s resounding victory in this case, with nine of 10 claims having been decided in Apple’s favor,” Apple said in a statement.
Tim Sweeney, Epic’s chief executive, wrote on Twitter: “Fortunately, the court’s positive decision rejecting Apple’s anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We’re working on next steps.”
Epic, which produces the popular game Fortnite, initiated the conflict with Apple in 2020 when it began offering Fortnite players discounts if they used Epic’s payment system instead of going through Apple or Google, a violation of both companies’ app store policies. Apple and Google removed Fortnite from their app stores, and Epic sued both companies.
The three-week trial in U.S. District Court in Oakland, Calif., offered a rare glimpse into the economics of Apple’s App Store, and Tim Cook took the stand for the first time as the company’s chief executive. Apple and Epic both appealed the judge’s ruling, setting off an extended legal process.