Just over a year after Epic Games sued Apple over its App Store policies that forced developers to use Apple’s in-app payment system, among other things, US District Court Judge Yvonne Gonzalez Rogers has issued a ruling in the case
While the judge did not find Apple to be a monopoly overall, she did find that the company engaged in “anti-competitive conduct under California’s competition laws,” and Gonzalez Rogers therefore therefore issued a nationwide permanent injunction (PDF Link) that blocks Apple from requiring app developers to use its in-app payments while preventing them from communicating to users about other options.
Last week Apple had announced plans to loosen its restrictions a bit, by allowing some app developers to include links in their apps that would direct users to outside websites where they could register for an account or enter payment information. But that change would not have applied to games like Epic’s popular Fortnite.
Today’s injunction, which is set to take effect in 90 days, will apply to all categories of apps distributed in the App Store.
According to the injunction, Apple is:
…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.
In a detailed explanation (PDF), the judge find that “Epic Games has not proven a present antitrust violation” against Apple, but that by prohibiting developers from even linking to outside payment options in their apps, Apple is “preventing informed choice among users of the iOS platform” in violation of the “policy [and] spirit” of California law.
In another part of the ruling, the judge find that Apple’s claim that the 30% cut it takes of revenue from in-app sales “is commensurate with the value developers get from the App Store” is “unjustified,” because there’s no way to prove that – some developers testified that Apple’s cut is too high. But since the only official way to install apps on an iPhone is through the Play Store, it’s not like you can really compare the benefits of being in the App Store to the competition… since there is no competition.
That said, today’s ruling isn’t wholly in Epic’s favor – in fact, Epic says it plans to appeal the ruling.
Update: Epic filed a notice appeal on September 12, 2021.
For one thing, today’s ruling only means that Apple has to allow developers to let users know about alternative ways to pay with in-app messaging and links to outside payment methods. But epic had wanted to force Apple to allow third-party app stores on iPhones and to allow developers to collect in-app payments using third-party systems. The ruling doesn’t go that far.
So Epic CEO Tim Sweeney says Fortnite won’t be returning to the App Store until the company can offer in-app payments using its own system.
Judge Gonzalez Rogers also ruled that Epic owes Apple millions of dollars after the company intentionally broke Apple’s Developer Product License Agreement (DPLA), an action that led to Apple booting Fornite from the App Store which, in turn, gave Epic an excuse to sue Apple.
Gonzalez Rogers writes that Epic owes Apple $12,167,719 in revenue “collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020″ plus 30% of any revenue Epic collected from November 2, 2020 through today.
Apple is accentuating the positive in its official statement to the court ruling, noting that “the Court has affirmed… [that] the App Store is not in violation of antitrust law.”
Apple’s response to Judge’s ruling in Epic Case: pic.twitter.com/LeF4osdTQC
— Mark Gurman (@markgurman) September 10, 2021
Epic Games has also sued Google over its Play Store policies, but no ruling has been issued in that case yet.