The main hearing in the dispute between Apple and Epic Games was
held in the spring. Now the verdict has been announced, and despite one element of the decision going against the Cupertino company, Apple is calling it a “huge win”.
Judge Yvonne Gonzalez Rogers of the Federal District Court of Northern California has ruled in the high-profile case between the two companies,
AppleInsider reports. In most areas, the judge rules in Apple’s favour. She rules, for example, that the company does not have a monopoly and therefore does not violate federal antitrust laws; she also declines Epic’s demand that Apple should be required to allow third-party app stores.
But Rogers does agree with Epic that Apple’s insistence that iOS app developers use its own payment system violates California’s antitrust laws, and instructs Apple to make a concession in this area. The company must no longer prevent developers from alerting users to alternative ways to pay.
“[Apple is] 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,” the judge writes.
The company now has 90 days to implement the necessary regulatory changes, unless a higher court overturns the ruling. This is not the first concession Apple has made concerning the App Store; last week we wrote that the App Store is under pressure
and Apple is cracking. But it could have been a lot worse. Really this is simply a
concession Apple had already made, only applied to a wider range of apps and on a faster timeframe.
In most other respects, indeed, the verdict is favourable to Apple. The judge agrees with Apple’s claim that the agreement between the two companies should be considered invalid; Epic is therefore in breach of contract and is ordered to pay 30% of the revenue from the period when Fortnite on iOS offered direct purchases. That’s at least $31m (roughly £22m).
Furthermore, the judge rules that Apple had every right to
close Epic’s developer account, and argues that Epic wanted to force Apple to give the company more control over the broader gaming market and not just the digital mobile game transaction market.
With aspects of the verdict favouring each company, it’s debatable whether either side can truly claim to have definitively won. But the companies’ respective responses to the verdict indicate how they feel about it.
Apple promptly sent Macworld a statement calling the ruling a “resounding victory” and a long list of favourable quotes from the verdict.
“We are very pleased with the Court’s ruling and we consider this a huge win for Apple,” said Apple SVP and General Counsel Kate Adams. “This decision validates that Apple’s ‘success is not illegal,’ as the judge said… We are still analysing the decision which is 180 pages long but the headline is that Apple’s app store business model has been validated.”
Epic CEO Tim Sweeney, meanwhile, said his company would appeal, and lamented that the ruling “isn’t a win for developers or for consumers”.
Confusingly, however, Spotify, another of Apple’s opponents in this dispute, welcomed the verdict.
“We are pleased with Judge Yvonne Gonzalez Rogers’ finding that Apple engaged in anti-competitive conduct and has permanently prohibited their anti-steering provisions,” said Horacio Gutierrez, Spotify’s Head of Global Affairs and Chief Legal Officer, in a
“This and other developments around the world show that there is strong need and momentum for legislation to address these and many other unfair practices, which are designed to hurt competition and consumers. This task has never been more urgent.”
There’s one obvious question following this verdict: will Fortnite now return to the App Store? After all, the popular game’s presence there was hugely lucrative for both companies, and gamers would also benefit from its return.
9to5Mac observes that Apple is not required to allow Epic or its games back on the App Store, since the termination of the company’s account was ruled as legitimate.
Apple has shown in the past that it is perfectly happy to partner with companies with which it has been in (or even is currently in) legal dispute: during the long-running
battle with Samsung over smartphone design patents Apple continued to employ the Korean firm as a supplier for phone screens and similar. Apple is unlikely to keep Epic off the App Store out of a sense of resentment.
This article originally appeared on
Macworld Sweden. Translation (using
DeepL) and additional reporting by David Price.