Epic vs. Apple ruling says Apple must allow users to be redirected to other payment systems
The ruling for the Epic vs. Apple trial has finally come in, just three months past its end. On the matter of Apple's "anti-steering" policies (meaning app developers are not allowed to steer customers to outside payment services), Judge Yvonne Gonzalez Rogers has ruled these anticompetitive, and has thus issued a permanent injunction forbidding Apple from preventing links to third-party payment systems. The injunction is set to go into effect in 90 days, at which point app developers will be allowed to implement these changes. The ruling reads:
Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them (“Apple”), are hereby permanently restrained and enjoined from prohibiting developers from (i) 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 ruling was not entirely in Epic's favour, however. Judge Rogers also sided with Apple on their claim that Epic breached their contract by adding a direct payment system to Fortnite on iOS. She has ruled that Epic must pay Apple damages equal to "30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020," plus "30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment, and interest according to law." She also felt that Epic did not establish that Apple is a monopoly, dashing Epic's hopes of opening up Apple's walled garden App Store.
Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. 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. 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. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist.
Since Apple was ruled to be justified in terminating Epic's developer account, they are not beholden to reestablish them or put Fortnite back on the App Store. While it's unknown right now what will happen, it is worth pointing out that just yesterday, South Korea instituted a new law that would require platform holders to allow redirection to outside payment services--exactly what got Fortnite kicked off the App Store, and exactly what this ruling has decided Apple must do in the United States. Epic took the opportunity to request their developer account be reinstated in South Korea and, in a move Epic CEO Tim Sweeney called "petty and ridiculous," Apple denied them.
This is also likely not the last we'll hear of this case. There is still a lengthy appeals process that both companies will likely pursue, but for now, this looks like it could have a major impact on the way Apple handles its App Store for the foreseeable future.
