The App Store is a major contributor to the profit growth that has helped give Apple its current market value of nearly $2.5tn, but how much the sector makes remained a heated point of contention during the trial.Īpple shares moved down about 3.3% on news of the decision. The trial saw Epic Games call Sweeney to testify as well as the Apple chief executive, Tim Cook.Ĭook in his highly anticipated testimony justified the way the App Store is run by appealing to user safety and privacy, arguing that Apple must thoroughly vet which apps are allowed on its platform. Apple responded by pulling the Fortnite game from the App Store.Įpic Games sued, and Friday’s ruling comes after a three-week trial in May before the US district court for the northern district of California. The feud between Apple and Epic Games intensified last August when Epic tried to bypass Apple’s App Store commission by launching its own payment system within its wildly popular game Fortnite. “Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers.” “Today’s ruling isn’t a win for developers or for consumers,” chief executive Tim Sweeney said on Twitter. “This measured remedy will increase competition, increase transparency, increase consumer choice and information while preserving Apple’s iOS ecosystem which has procompetitive justifications.”Įpic made clear on Friday that while key components of the case were ruled in its favor, it does not consider the decision a win, and that it plans to appeal. “A remedy to eliminate those provisions is appropriate,” the court ruling read. The judge ruled Epic failed to demonstrate Apple is an illegal monopolist, but did show the smartphone giant engaged in “anticompetitive conduct” under California laws. Gonzalez Rogers stopped short of granting Epic some of its other wishes, such as forcing Apple to open the iPhone up to third-party app stores. ![]() The ruling also said that Apple cannot ban developers from communicating with customers via contact information that the developers obtained when customers signed up within the app. Judge Yvonne Gonzalez Rogers issued a nationwide order that allows developers to put into their apps “buttons, external links, or other calls to action that direct customers to purchasing mechanisms”. It took aim at Apple’s in-app purchase policies, under which it charges developers up to 30% commission on profits.įriday’s ruling strikes down a core part of Apple’s App Store rules, which prohibit developers from telling users about other places they can go to pay the developer directly rather than using Apple’s payment mechanisms. Epic accused Apple of running its App Store as a monopoly, exercising too much power over what apps are allowed and how they are run. Part II covers the application of the facts to the law and includes the Court’s legal market definition and market power assessment, its findings under federal antitrust law (Sections 1 and 2 of the Sherman Act) and state antitrust law (California’s Cartwright Act and Unfair Competition Law), and its breach of contract findings.The ruling came as part of a lawsuit brought by Epic Games, the creator of Fortnite. Part I of the summary covers the findings of fact, which includes the Court’s factual findings on the different product and geographic markets proposed by Epic Games and Apple, on the anticompetitive effects alleged by Epic Games, and on the business justifications put forward by Apple. Apple decision into a six-page overview covering all the main parts of the decision. A yearlong trial ensued, the result of which is a 185-page decision, which was handed down by Judge Yvonne Gonzalez Rogers on September 10, 2021. Apple soon thereafter countersued for breach of contract. ![]() ![]() That same day, Apple removed Fortnite from the App Store and Epic Games filed an antitrust suit in a federal district court in California. ![]() After Apple refused, Epic Games violated the App Store rules by enabling its own payment method in the Fortnite iOS app on August 13, 2020. Dissatisfied with these policies, Epic Games tried to use its flagship game Fortnite as leverage to convince Apple to open up its closed platform. Through this system, Apple automatically collects a 30% commission on all such transactions. Apple similarly requires developers to exclusively use its own in-app payment system for app purchases and in-app purchases for digital content. For instance, Apple prohibits the distribution of iOS apps outside of the App Store, which Apple fully controls. By Natalia Moreno Belloso (European University Institute)Īt the heart of the legal battle between Epic Games and Apple is a set of restrictions Apple imposes on app developers.
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