Federal Judge Deals Apple a Massive Blow with App Store Ruling
A California judge on Friday delivered a big victory to opponents of Big Tech titan Apple in a dispute about how the company’s app store handles payments.
Epic Games, the maker of the popular video game “Fortnite,” had sued Apple over the company’s policy requiring companies to use its in-app payment system for purchases and payments.
The complaint was that Apple does not permit the apps it carries to include their own external methods to extract payments from customers. As a result of the company rule, purchases made by customers from developers must be processed by Apple, and the company gets a cut of 3 percent.
The “Fortnite” app ignored rules from Apple and was removed from the app store last August, which led to the lawsuit by Epic Games.
Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California ruled Friday that California-based Apple was in violation of the state’s Unfair Competition Law, CNN Business reported.
Apple was getting 30 percent of the income Epic Games was generating through iOS devices.
The company no longer can force developers to kick money up, and that includes the “V-bucks” currency commonly sought after by kids playing “Fortnite.”
But Rogers stopped short of branding Apple as a monopoly, a label that Epic Games had sought.
“Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” the ruling said. “Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market.”
Apple issued a statement declaring victory on the antitrust question.
“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” the company said. “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.”
Apple said its app store is a “safe and trusted marketplace” that supports more than 2 million jobs in the United States.
Apple’s response to Judge’s ruling in Epic Case: pic.twitter.com/LeF4osdTQC
— Mark Gurman (@markgurman) September 10, 2021
The company’s stock price tumbled 3 percent immediately after the ruling.
Epic Games CEO Tim Sweeney also issued a number of statements on Twitter and suggested his company would continue to fight. He said the issue was one of “fair competition.”
Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. https://t.co/cGTBxThnsP
— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
Sweeney also clarified that his company would not return “Fortnite” to the app store until it found better terms that would save customers money.
Thanks to everyone who put so much time and effort into the battle over fair competition on digital platforms, and thanks especially to the court for managing a very complex case on a speedy timeline. We will fight on.
— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
Any ruling that might classify Apple as being in violation of antitrust laws would be sure to reverberate across the tech world.
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