Payment methods

Epic Games Judge Says Apple Must Allow Alternative Payment Methods On App Store

Apple and Epic Games have been stuck in legal action since the iPhone maker pulled Fortnite from the App Store over a year ago. Today, September 10, the trial judge issued a permanent injunction in favor of Epic in certain respects, forcing Apple to allow app developers to generate revenue outside of the App Store ecosystem. .

Judge Yvonne Gonzalez-Rogers concluded in the ruling that the court could not prove that Apple was engaging in monopoly behavior under federal or state antitrust laws, but that “the lawsuit showed that Apple was engaging in a anti-competitive behavior under California competition laws. ” This is the only charge the court sided with on Epic Games’ side, with Apple winning the other nine charges.

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“The Court does not find that Apple is an antitrust monopoly in the mobile game transactions submarket,” he added. the decision reads. “However, he finds that Apple’s conduct in enforcing the anti-management restrictions is anti-competitive. A remedy to eliminate these provisions is appropriate. This measured remedy will increase competition, increase transparency, increase choice and information. consumers while preserving Apple’s iOS ecosystem which furthermore does not force the Court to micromanage business transactions that the courts are not well placed to do, as the Supreme Court has rightly recognized .

“Success is not illegal,” the decision continues. “The final trial record did not include evidence of other critical factors, such as barriers to entry and declining production or declining innovation in the relevant market. demonstrate that Apple is an illegal monopolist. “

With this injunction, the court now declares that Apple is “permanently restricted and ordered to prohibit developers from including in their applications and their metadata buttons, external links or other calls to action that direct the customers to purchasing mechanisms, in addition to In-App Purchases and (ii) communication with customers via contact points obtained voluntarily from customers via account registration in the app. “

This is a landmark decision that will have ramifications not only for Epic Games, but for all App Store developers. This means that they can legally bypass the royalties demanded by Apple for all apps published on iOS since the launch of the App Store. It also means Google could face similar treatment, with the tech giant also involved in legal proceedings with Epic Games over the same concerns.

Epic Games was forced to pay Apple $ 12 million for its breach of contract last year, but rules broken at the time are no longer a factor for App Store developers. Apple will have to make this change within 90 days of the decision, while Epic Games will have to pay 30% of the fine at the same time.

Speaking to GameSpot, attorney Richard Hoeg said, “On a preliminary review, this appears to be an almost total victory for Apple. The judge has harsh words for Apple’s business model and some of its testimony at trial, but ultimately finds it a monopolist or otherwise acting in violation of federal antitrust law, instead finding that Epic violated its agreement and that Apple can end their relationship if they want to. “

This decision comes just hours after Apple refused to allow Epic Games to reinstate Fortnite on the App Store in South Korea. Earlier this week, the The South Korean government has issued a similar ruling to Apple, preventing them from forcing app developers to its royalty regime for similar antitrust issues.

It could also mean that previously restricted apps from the App Store, such as Xbox Cloud Gaming, could now find their way to the store (we’ve reached out to Microsoft for comment). Apple will host its annual fall iPhone event on September 14. It is not yet clear whether either or both plan to appeal, but Hoeg believes calls from both sides will come.

“Now, frankly, I expect both sides to appeal the ruling, Apple regarding anti-steering (especially enforcing California state law nationwide) and Epic on pretty much everything else, ”Hoeg said.

In response to the ruling, Apple released a statement citing the judge’s ruling that “success is not illegal.” You can read the full statement below.

Epic CEO Tim Sweeney also commented on the judgment, claiming it’s not actually a win for developers or consumers and suggesting Fortnite might not be returning to the App Store anytime soon.

“Today’s decision is not a victory for developers or consumers. Epic is fighting for fair competition between in-app payment methods and app stores for a billion consumers,” said Sweeney. “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 the savings on to consumers. Thank you to everyone who contributed so much. time and effort in the battle for fair competition on digital platforms, and most of all thanks to the court for handling a very complex case in a timely manner. We will continue to fight.

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