"[Apple is] permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms"
What you need to know
- Epic Games has won a partial victory against Apple.
- A judge has ruled Apple cannot stop developers from directing users to other methods of payment in their apps.
- The court ruled in favor of Apple on all but one count.
A judge has ruled in the Epic Games vs Apple case that whilst the company is not a monopolist, it cannot stop developers from linking to other payment mechanisms in their apps, in a major blow for the Cupertino company.
A court ruling states
[Apple is] permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
Despite the fact that Apple has beaten Epic in all but one count of the lawsuit, the ruling is a massive blow to Apple's App Store policies and defenses lodged over the last year, and it is highly likely Apple will appeal the ruling. The injunction as it stands will take effect in 90 days.
Apple has already made a concession similar to this regarding reader apps like Netflix and Spotify, but that didn't apply to all apps, especially not games like Fortnite.
Interestingly, the ruling makes no reference to Epic Games or Fortnite, or Apple's decision to terminate the Epic Games developer account.
Not all bad news, Judge Gonzalez Rogers ruled in favor of Apple regarding Epic Games' breach of App Store contract, ordering the company to pay Apple 30% of $12.1 million for money earned between August and October 2020, and 30% of any revenue earning from November 2020 until today. The Judge also reiterated the court's ruling that Apple's decision to terminate the Epic Games developer account was lawful:
(2) a declaration that (i) Apple's termination of the DPLA and the related agreements between Epic Games and Apple was valid, lawful, and enforceable, and (ii) Apple has the contractual right to terminate its DPLA with any or all of Epic Games' wholly owned subsidiaries, affiliates, and/or other entities under Epic Games' control at any time and at Apple's sole discretion.
In an explanation of the ruling, YGR stated:
Ultimately, after evaluating the trial evidence, the Court finds that the relevant market here is digital mobile gaming transactions, not gaming generally and not Apple's own internal operating systems related to the App Store. The mobile gaming market itself is a $100 billion industry. The size of this market explains Epic Games' motive in bringing this action. Having penetrated all other video game markets, the mobile gaming market was Epic Games' next target and it views Apple as an impediment.
The Judge concluded that Apple is not a monopolist under federal or state laws, noting a high market share and big profits but stating that "success is not illegal." Rogers concludes:
Thus, and in summary, the Court does not find that Apple is an antitrust monopolist in the submarket for mobile gaming transactions. However, it does find that Apple's conduct in enforcing anti-steering restrictions is anticompetitive. A remedy to eliminate those provisions is appropriate. This measured remedy will increase competition, increase transparency, increase consumer choice and information while preserving Apple's iOS ecosystem which has procompetitive justifications. Moreover, it does not require the Court to micromanage business operations which courts are not well-suited to do as the Supreme Court has appropriately recognized.
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