More than a year after Epic Games decided to circumvent Apple’s App Store rules, by putting its own payment system within its popular game Fortnite, a judge has given Epic a partial victory in its lawsuit.
Judge Yvonne Gonzalez Rogers handed down a permanent injunction Friday morning blocking Apple from “prohibiting developers from including in their apps ... links or other calls to action” that tell customers about alternative payment options for apps — something that had been barred by Apple’s App Store rules.
The move will give developers more options for getting around Apple’s 30% fee on in-app purchases, a decision that will drastically change how the App Store makes money.
However, Gonzalez Rogers stopped short of saying Apple operated an illegal monopoly.
“(The) court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” she wrote.
“While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct,” she wrote. “Success is not illegal.”
Gonzalez Rogers added that the court did not say “it is impossible” to determine whether Apple could be a monopolist, just that Epic Games “failed in its burden to demonstrate Apple is an illegal monopolist.”
Epic has not yet responded to requests for comment.
In a statement, Apple focused on the judge’s decision that Epic did not demonstrate Apple operated an illegal monopoly.
“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” the company said in a statement. “... Apple faces rigorous 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 ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone,” Apple added.
The judge’s injunction is set to take effect within 90 days, unless a higher court steps in. It is unclear, yet, whether Apple or Epic Games will appeal Gonzalez Rogers’ decision.
In its lawsuit against Apple, the Goliath of the tech world, Cary-based Epic Games played the role of David, pushing the judge to give developers more power against Apple’s App Store and its giant-size share of purchases made within apps.
Over three weeks this summer, Epic argued in court that developers should have more than one way to get their apps onto iPhones and the ability to use any payment system they desired. Currently, the only way to download an app onto an iPhone is through the App Store, and developers must use Apple’s internal payment system.
The lawsuit dates to August 2020, when Epic Games placed an alternative payment system within the iPhone and Android versions of Fortnite, a move that allowed the company to ignore the 30% in-app purchasing fee both Apple and Google levy.
Both Apple and Google then booted Fortnite from their respective app stores, leading to Epic’s antitrust lawsuits against the companies.
The Apple lawsuit has proceeded more quickly than the one against Google, which still hasn’t made it to trial yet.
In May, Epic and Apple’s lawyers argued in court for multiple weeks in front of Gonzalez Rogers. The testimony featured both Epic’s CEO Tim Sweeney and Apple CEO Tim Cook.
Gonzalez Rogers, perhaps, had hinted at what her decision might land on the last day of in-court arguments.
Following up on her questioning of Cook, she seemed to indicate that she wasn’t convinced that Apple was facing much competitive pressure on pricing.
“The 30% (in-app purchasing fee) number has been there since the inception,” she said. “And if there was real competition, that number would move. And it hasn’t. ... So far there doesn’t seem to be anything that is in the market itself that is pressuring Apple to compete for developers.”
The ruling could now provide developers with more tools to lower those fees.
