Judge Rules In Favor Of Apple In Epic Games Antitrust Lawsuit But Allows Third-Party IAPs
After over a year of motions, counter-claims, and posturing, the Epic Games vs. Apple antitrust lawsuit has finally come to an end as Judge Yvonne Gonzales-Rogers rules in favor of Apple in 9 counts out of 10, but essentially gave Epic Games and other developers what they’ve been fighting for all along – the ability to put alternative payment methods within their apps.
“A nationwide injunction shall issue enjoining Apple from prohibiting developers to include in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP,” ruled Gonzales-Rogers.
Furthermore, Apple may not prohibit app developers from communicating with their users using contact information given voluntarily during the account registration process.
According to Judge Gonzales-Rogers, she couldn’t conclude that Apple was practicing monopoly under the current laws and based on Epic’s legal arguments. She did, however, agree that Apple was engaging in anti-competitive behavior under California’s laws. On the other hand, she also called out Epic Games’ motives in filing the antitrust lawsuit and found Epic guilty of breach of contract when they underhandedly added a direct payment button.
“The mobile gaming market itself is a $100 billion industry,” she said. “The size of the market explains Epic Games’ motive in bringing this action. Having penetrated all other video game markets, the mobile gaming market was Epic Games’ next target and it views Apple as an impediment.”
Epic Games will also be required to pay the reliefs and damages that they agreed to pay Apple should the breach of contract counterclaim be enforcible.
“This trial highlighted that ‘big tech’ encompasses many markets, including as relevant here, the submarket for mobile gaming transactions. This lucrative, $100 billion, market has not been fully tapped and is ripe for economic exploitation. As a major player in the wider video gaming industry, Epic Games brought this lawsuit to challenge Apple’s control over access to a considerable portion of this submarket for mobile gaming transactions. Ultimately, Epic Games overreached. As a consequence, the trial record was not as fulsome with respect to antitrust conduct in the relevant market as it could have been.
Thus, and in summary, the Court does not find that Apple is an antitrust monopolist in the submarket for mobile gaming transactions. However, it does find that Apple’s conduct in enforcing anti-steering restrictions is anticompetitive. A remedy to eliminate those provisions is appropriate. This measured remedy will increase competition, increase transparency, increase consumer choice and information while preserving Apple’s iOS ecosystem which has procompetitive justifications. Moreover, it does not require the Court to micromanage business operations which courts are not well-suited to do as the Supreme Court has appropriately recognized.”
Here is Apple’s response to the ruling:
“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law. As the Court recognized ‘success is not illegal.’ 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.”
Epic Games CEO Tim Sweeney also released a statement in response, saying that, “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. Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”