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Judge Yvonne Gonzalez Rogers issued a permanent injunction in the Epic vs. Apple Friday morning, imposing new restrictions on Apple’s App Store rules and ending months of bitter legal wrangling.
As part of the new order, Apple is:
permanently restricted and directed to prohibit developers from including in their applications and their metadata buttons, external links or other calls to action that direct customers to purchasing mechanisms, in addition to in-app purchases and communication with customers via touchpoints obtained voluntarily from customers via account registration in the app.
In short, iOS apps should be allowed to direct users to payment options other than those offered by Apple. The injunction is expected to take effect in 90 days – December 9 – unless ordered by a higher court.
In a separate judgment, the court claimed that Epic Games violated its contract with Apple when it implemented the alternative payment system in the Fortnite application. As a result, Epic has to pay Apple 30% of all revenue collected through the system since its implementation, which is more than $ 3.5 million.
In the full decision, Judge Gonzalez Rogers further explained her thinking on the matter. In particular, the judge rejected the definition of the two parts of the market involved in the case. “The relevant market here is digital mobile game transactions, not games in general and not Apple’s own internal operating systems linked to the App Store,” wrote Gonzalez Rogers.
According to this definition of the market, “the court cannot ultimately conclude that Apple is a monopoly under federal or state antitrust laws,” she continued. “Nonetheless, the lawsuit found that Apple was engaging in anti-competitive behavior under California competition laws.”
Asked for comment, Apple called the decision a victory for the App Store model. “Today, the court confirmed what we have known from the start: the App Store does not violate antitrust law,” said a representative. “Apple faces stiff competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to making the App Store a safe and trustworthy marketplace.
On Twitter, Epic CEO Tim Sweeney expressed disappointment with the order. “Today’s decision is not a victory for developers or for consumers,” Sweeney said. “Epic is fighting for fair competition between in-app payment methods and app stores for a billion consumers.” In addition, a spokesperson for Epic Games says NPR that the company plans to appeal.
The new restrictions include echoes of some interim anti-management restrictions already imposed on Apple outside of the United States. On September 1, Apple agreed to allow external registration links for “player” apps like Netflix and Spotify, following a regulatory investigation in Japan. More recently, a South Korean law has opened the door to alternative payment systems, although the practical impacts of the law are still unclear.
Apple and Epic Games have disagreed for years over the transaction fee system in the iOS App Store, which Apple sees as a necessary operating cost but which Epic sees as a monopoly tax. The fight came to a head in August 2020 when Epic installed an alternative payment system in Fortnite to bypass App Store transaction fees. Apple responded by deleting Fortnite from the App Store, which triggered an immediate legal complaint from Epic.
The ensuing lawsuit was a brutal standoff against the App Store model and Apple’s efforts to maintain control of software over iOS. Among other things, we learned about Apple’s weird accounting methods and charm offensive to get major players like Netflix to use in-app purchases.
The decision is likely to have significant impacts outside of Apple. Google is already facing a similar lawsuit from Epic Games over its own efforts to maintain the Google Play Store as a central source of software on Android, building on elaborate agreements with phone makers.
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