Epic Games has won a major ruling in their court case against Apple over the iOS App Store rules and in-app payments in a manner that could redefine the App Store for other apps. However, they have lost their personal battle, the court finding that Apple was within its rights to pull Fortnite from the store and terminate Epic’s accounts for breaching contract.
Both side are surely going to drag the case further through the US courts system with appeals to try and get a ruling that they like. Meanwhile, there’s other court cases and potential actions by lawmakers that could still tip the balance one way or another.
The full ruling can be found here, but you might want to put the kettle on. It’s 185 pages long!
Epic’s sollitary win comes in regard to anti-steering rules that Apple has put in place. Apple prevents app creators from pointing users to other ways to make in-app purchases or equivalent payments. It’s these rules that are the reason why opening Netflix simply presents a log in screen and nothing more, as Netflix simply doesn’t want to pay Apple’s 30% cut.
The ruling states that Apple is:
permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
This ruling means that developers could now put in a link to an external payment system. It also allows them to directly contact users through emails and other methods.
In both these regards, Apple is ruled to have been acting in an anti-competitive matter under Californian law, though Judge Yvonne Gonzalez-Rogers said that “Ultimately, Epic Games overreached” in all their other claims and that because of the attempted scope of the trial and the manner in which Epic presented their case, it was “not as fulsome with respect to antitrust conduct in the relevant market as it could have been.” It doesn’t help that Judge Gonzales-Rogers felt that the case was narrowed specifically to “digital mobile gaming transactions” and not either of the broader definitions that Apple and Epic wanted to pursue.
The big problem for Epic is that, while they could have got their way by simply taking the case to court and arguing that the anti-steering measures were unlawful, they wilfully breached their contract and refused to backtrack. This was why they failed to get a preliminary injunction to get back onto the App Store last year, and it’s why the court has now ruled that Apple were within their rights to enforce their contracts with Epic by pulling the apps and terminating their accounts. There could be some major fallout from that in the weeks that follow.
To add a little insult to injury, Epic must also pay Apple 30% of any purchases that they processed while their direct payment system was active between August and October 2020. Sure, it’s only 30% of $12 million, but even so.
It’s not clear what Apple’s next steps will be. Epic was in breach of contract, and a preliminary injunction was required so that their developer accounts for Unreal Engine were not removed, but Apple could theoretically now ban them all over again.
Fundamentally, while the anti-steering measures have been found to be anticompetitive which could significantly change how developers approach making money from the App Store going forward, Apple still holds the keys to the castle.