Large win for Epic Video games: Apple has 90 days to open App Retailer funds
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On Friday, the Northern California judge handling the closely watched Epic Games trial against Apple passed a verdict that in many ways is in Apple’s favor – with one massive exception that changes the App Store.
The ruling by US District Judge Yvonne Gonzalez Rogers includes a unilateral injunction requiring Apple to open payment options for all software vendors in the App Store. In other words, Epic Games’ efforts to add Epic-specific payment links into the free-to-play game Fortnite and thereby pay Apple’s 30 percent fee for in-app transactions can now be done.
The injunction is aimed at Apple, not Epic, and calls on the device and software manufacturer to stop preventing developers from including their own direct purchase links in their apps. Nor can Apple prevent app makers from communicating with customers through a method customers choose (such as an email newsletter) through purchase options. Starting today, September 10, 2021, Apple has 90 days until this injunction takes effect and becomes actionable.
No antitrust violation
The huge 185-page verdict begins by clarifying that one of the lawsuit’s larger allegations that Apple committed antitrust behavior doesn’t quite hold up. Apple pointed out this detail in its own statement on the judgment:
Today the court confirmed what we have always known: The App Store does not violate antitrust law. As the court recognized, “success is not illegal”. Apple faces fierce competition in every segment we do, and we believe customers and developers choose us because our products and services are the best in the world. We continue to be committed to ensuring that the App Store is a safe and trustworthy marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply to all.
While Epic Games’ general stance on payment options in the App Store was successful and led to the injunction, Epic itself is threatened with consequences as the court did not find Apple to be in breach of contract. Specifically, Epic will have to pay Apple damages to offset the 30 percent cut in Fortnite in-app purchases that Epic would have paid Apple in the first place had Fortnite not launched its own payment model for three months in 2020, that amount alone amounts to $ 3.65 million, and the ruling mentions other damages as well.
Since Apple’s decision to lock Epic Games’ developer account within the Apple ecosystem was “valid, lawful and enforceable” in the judgment, Apple still cannot use Epic Games as a licensed and approved developer.