Epic Games wins lawsuit victory against Apple over App Store payments [Update]
What you need to know
- Epic Games has won a partial victory against Apple.
- A judge has ruled Apple cannot stop developers from directing users to other methods of payment in their apps.
- The court ruled in favor of Apple on all but one count.
Update, September 10 (5:30 pm ET): Epic CEO Tim Sweeney and Apple have issued statements in response to the decision.
A judge has ruled in the Epic Games vs Apple case that whilst the company is not a monopolist, it cannot stop developers from linking to other payment mechanisms in their apps, in a setback for the Cupertino company.
A court ruling states
Despite the fact that Apple has beaten Epic in all but one count of the lawsuit, the ruling is a blow to Apple's App Store policies and defenses lodged over the last year.. The injunction as it stands will take effect in 90 days. It means that developers will be able to give customers the chance to go outside of Apple's App Store to make payments for digital goods and services.
In a statement to iMore Apple welcomed the court's ruling:
In a clearly calculated move, Apple didn't even acknowledge the concessions the court is asking it to make, nor did it make reference to any future plans to appeal the resolution.
Apple has already made a concession similar to this regarding reader apps like Netflix and Spotify, but that didn't apply to all apps, especially not games like Fortnite.
Not all bad news, Judge Gonzalez Rogers ruled in favor of Apple regarding Epic Games' breach of App Store contract, ordering the company to pay Apple 30% of $12.1 million for money earned between August and October 2020, and 30% of any revenue earning from November 2020 until today. The Judge also reiterated the court's ruling that Apple's decision to terminate the Epic Games developer account was lawful:
This is a huge aspect of the case, as it means Apple will not be required (at least by law) to reinstate Epic Games' developer account, meaning Fortnite might never return to Apple devices. Indeed, Epic Games CEO Tim Sweeney lamented the decision, stating the ruling wasn't "a win for developers or for consumers", stating the company was "fighting for fair competition among in-app payment methods and app stores for a billion consumers." Sweeney went on to says Fortnite would only return to the iOS App Store when it could offer in-app payments and pass along savings to consumers, vowing to fight on in the case.
In an explanation of the ruling, YGR stated:
The Judge concluded that Apple is not a monopolist under federal or state laws, noting a high market share and big profits but stating that "success is not illegal." Rogers concludes:
In response to the ruling the Apple-backed Chamber of Commerce issues a statement from its CEO Adam Kovacevich. stating:
Update, September 10 (5:30 pm ET) — Epic and Apple have issued statements in response to the decision.
Epic says that it plans to appeal today's decision. Epic CEO Tim Sweeney released a statement saying that today's decision is not a win for developers or customers.
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/cGTBxThnsPToday'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, 2021September 10, 2021
Apple seems to believe that, while it is not a win for Epic, it is a decision that has validated the business model of the App Store.
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Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.
Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9
How can you not see how big this is for Apple despite the smaller setback?
The judge ruled that Apple's decision to cut off Epic Games' developer account within the App Store environment was, "valid, lawful, and enforceable". Apple can continue to ban Epic Games return to the App Store as a licensed and approved developer. This includes removing the Unreal Engine.
As a result of Epic's breach of contract, it must PAY damages of at least 3.5 MILLION DOLLARS.
I’m moving on to more serious websites for my Apple news…. Adios….