Epic Games vs. Apple Judgment Lets App Store Developers Link to Alternative Payment Methods

A decision was made today in Epic Games’ high-profile lawsuit against Apple, with U.S. District Judge Yvonne Gonzalez Rogers ruling Apple’s anti-management conduct anti-competitive and ruling Apple’s favor over all the other charges.

In an 185-page decision, Judge Rogers said that “the court ultimately cannot find that Apple is a monopoly under federal or state antitrust laws,” but said the lawsuit “showed that Apple engaged in anti-competitive behavior under California competition laws. “Rogers concluded that” Apple’s anti-management provisions hide critical information from consumers and illegally stifle consumer choice “:

After defining the relevant market as digital mobile game transactions, the Tribunal then assessed Apple’s behavior in this market. Based on the trial record, the Court ultimately cannot conclude that Apple is a monopoly under federal or state antitrust laws. While the Court finds that Apple enjoys a sizable market share of over 55% and extraordinarily high profit margins, these factors alone do not indicate antitrust behavior. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and driving down production or declining innovation in the relevant market. The Court does not find that this is impossible; only that Epic Games has failed to demonstrate that Apple is an illegal monopolist.

Nonetheless, the lawsuit found that Apple was engaging in anti-competitive behavior under California competition laws. The Court finds that Apple’s anti-leadership provisions hide critical information from consumers and illegally stifle consumer choice. When coupled with Apple’s nascent antitrust violations, these anti-management provisions are anti-competitive and a nationwide remedy to eliminate these provisions is warranted.

Judge Rogers therefore issued a permanent injunction that requires Apple to let US developers direct customers to payment options other than Apple’s in-app purchase system:

Apple Inc. and its officers, agents, servants, employees and any person in concert or in active participation with them (“Apple”), are hereby at all times prohibited and enjoined from prohibiting developers (i) from including in their apps and metadata buttons, external links or other calls to action that direct customers to purchasing mechanisms, in addition to in-app purchases and (ii) communication with customers through touchpoints obtained voluntarily from customers through account registration in the app.

Apple already announced last week that starting in early 2022, it would allow developers of “player” apps like Netflix, Spotify, and the Amazon Kindle app to include an in-app link to their website. for users to create or manage an account. . If this decision is confirmed, however, Apple will have to extend this allocation to all types of applications. The decision also ensures that developers would be able to explicitly mention other payment options.

The saga began in August 2020, when Apple removed Fortnite from the App Store after Epic Games introduced a direct payment option in the app, in defiance of the App Store rules. In an orchestrated move, Epic Games quickly filed a lawsuit against Apple, accusing Apple of having a monopoly on the sale of apps and in-app purchases through the App Store. (See our timeline of events surrounding the trial for more details.)

Judge Rogers ruled that Epic Games should pay damages equivalent to 30% of the $ 12,167,719 in revenue that Epic Games collected from users of the Fortnite app on iOS via the direct payment option between August 2020 and October 2020, plus 30% of such Epic Games income collected from November 1, 2020 until the date of judgment, plus interest.

Apple is likely to appeal the decision. We have contacted the company for comment and will update this story if we have any news.

Update: Apple released the following statement, as shared by Nick Statt:

Today, the court affirmed what we have always known: the App Store does not violate antitrust law. As the Court recognized, “success is not illegal”. Apple faces stiff competition in every segment in which we operate, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring that the App Store is a safe and trusted marketplace that supports a thriving developer community and over 2.1 million jobs in the United States, and where the rules apply. equal to everyone.

The court documents associated with the decision are incorporated below.