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Epic v/s Apple: Apple wins, must allow in-app payment alternatives
Apple wins case against Epic, but must allow alternative methods for in-app payments

Epic v/s Apple: Apple wins, must allow in-app payment alternatives

Sep 13, 2021
03:44 pm

What's the story

Epic Games and Apple have been embroiled in a legal battle since August 2020 when the former sued the latter alleging anti-competitive and monopolistic practices. Apple has, however, triumphed over the game developer after US District Judge Yvonne Gonzalez Rogers issued a 185-page ruling on the matter alongside a small win for Epic in the form of a permanent injunction against Apple. Here's more.

Beginnings

Epic must pay Apple $3.5mn for violating App Store contract

The legal battle ensued when Apple booted Epic Games' Fortnite off the App Store citing violation of the agreement to use Apple's own payments platform for in-app purchases (IAPs). Epic flouted this rule to avoid paying Apple a 30% commission on earnings through IAPs. The judge found Epic guilty of this and directed it to pay Apple over $3.5 million as compensation.

Apple wins

Court declares App Store isn't monopolistic, antitrust law violator

Epic dragged Apple to court over its actions and alleged that Apple was monopolistic and violated US antitrust law. In the judgment, judge Gonzalez Rogers said, "The Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws." Apple made sure to highlight this, claiming the court reaffirmed what it knew all along—the App Store isn't violating antitrust laws.

Mixed verdict

Court finds Apple in violation of California competition laws

Dejected, Epic Games founder and CEO said on Twitter that the ruling "isn't a win for developers or for consumers." However, not all was lost. The judge noted that Apple was still in violation of California competition laws. Issuing a permanent injunction, the judge ruled that iOS app developers must be allowed to direct users to payment options other than Apple's proprietary IAP system.

Iron hand

Court opines Apple's decision to boot epic was lawful

This injunction is set to take effect in 90 days (i.e., on December 9) unless it is overturned by a higher court. According to the judge's ruling, the decision to boot Fortnite from the App Store was "valid, lawful, and enforceable," and it is Apple's prerogative whether to reinstate Epic Games' developer account on the App Store or not.

Details

Apple is artificially increasing its market power

In the context of the aforementioned injunction, the judge noted Apple's "anti-steering restrictions artificially increase Apple's market power by preventing developers from communicating...lower prices on other platforms." These "illegally stifle consumer choice," are "anti-competitive," and a "nationwide remedy to eliminate those provisions is warranted," the judge opined. The ruling appears to benefit both parties, although we suspect Epic Games founder-CEO Sweeney isn't content yet.

Twitter Post

Is Sweeney playing chess while Apple plays checkers?