Apple App store policies upheld by court in antitrust challenge by Epic
Apple Inc. won an appeals court ruling upholding its App Store's policies in an antitrust challenge brought by Epic Games Inc.
Monday's ruling by the U.S. Ninth Circuit Court of Appeals affirmed a lowercourt judge's 2021 decision largely rejecting claims by Epic, the maker of Fortnite, that Apple's online marketplace policies violated federal law because they ban third-party app marketplaces on its operating system. The appeals panel upheld the judge's ruling in Epic's favor on California state law claims.
The ruling comes as Apple has been making changes to the way the App Store operates to address developer concerns since Epic sued the company in 2020. The dispute began after Apple expelled the Fortnite game from the App Store because Epic created a workaround to paying a 30% fee on customers' in-app purchases.
“There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power,” the threejudge panel said. “Our job as a federal court of appeals, however, is not to resolve that debate — nor could we even attempt to do so. Instead, in this decision, we faithfully applied existing precedent to the facts.”
Apple and Epic representatives didn't immediately respond to requests for comment.
In September 2021, US District Judge Yvonne Gonzalez Rogers concluded that Apple's policies prevent consumers from getting cheaper prices but rejected Epic's claims that the App Store is run like a monopoly in violation of federal antitrust law.
Following a three-week trial in Oakland, California, Rogers ordered the technology giant to allow developers of mobile applications steer consumers to outside payment methods, granting an injunction sought by Epic. The judge, how
ever, didn't see the need for third-party app stores or to push Apple to revamp policies over app developer fees.
Apple has argued that it needs to closely police the applications that run on its ubiquitous phones to protect users against fraudsters, hackers, malware and spyware.
But even before Rogers ruled, Apple already was making changes to how the App Store operates to mitigate developer concerns.
One was to allow developers to “steer” consumers — in some scenarios — to make payments for subscription apps outside of Apple's own payment system. This means that socalled “Reader apps,” which encompass apps and services for digital newspapers and magazines, books, audio streaming and video watching, can point users to the web with a button to complete their sign-up.
That addressed a core issue within Epic's lawsuit against Apple, but the current Apple policy doesn't apply to gaming apps. Epic's software, including hit game Fortnite, still remains off of the App Store and Apple devices, but Epic Games Chief Executive Officer Tim Sweeney has hinted as a return to the platform in 2023.
U.S. and European authorities have taken steps to rein in Apple's stronghold over the mobile market. In response to the Digital Markets Act — a new series of laws in the European Union — Apple is planning to allow outside apps as early as next year as part of an update to the upcoming iOS 17 software update, Bloomberg News has reported.
Amid a changing legal landscape, Apple also plans to let users more easily change default settings, allow alternative web browsing engines, and open up more of its in-house features, such as Camera or Find My apps, to thirdparty developers.
Epic has made similar allegations about anticompetitive conduct in a lawsuit against Google over its Google Play store. The Alphabet Inc. unit has denied wrongdoing.
The case is Epic Games Inc. v. Apple Inc., 21-16695.*