The long-running anti-trust tussle between Apple and Epic just got another interesting development. In a major victory for Apple, the US Ninth Circuit Court of Appeals upheld a decision made by a lower court in 2021 and ruled that Apple’s App Store policies were not in violation of federal competitive laws. The Court of Appeals rejected the claims made by Fortnite-maker Epic Games. This ruling maintains the status quo, which is unlikely to change unless either company makes further appeals and moves the case to a higher court.
Epic, which locked horns with the iPhone maker over its App Store in recent years, has claimed for a long time that Apple’s policy of banning alternative app stores on its devices is illegal, and the ban of third-party app marketplaces on its operating system was in violation of federal laws. However, the appeals court on Monday mostly sided with Apple, something that is likely to send waves across the industry.
“There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power,” the three-judge 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.”
“Today’s decision reaffirms Apple’s resounding victory in this case, with nine of ten claims having been decided in Apple’s favor. For the second time in two years, a federal court has ruled that Apple abides by antitrust laws at the state and federal levels. The App Store continues to promote competition, drive innovation, and expand opportunity, and we’re proud of its profound contributions to both users and developers around the world,” the Cupertino-headquartered Apple said in an official statement, hailing the decision of the appeals court as a “resounding victory” for the tech titan. “We respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review,” it added.
Speaking more about the claim in question, the court sided with Apple on nine out of ten claims in the antitrust challenge. The tenth claim (and the one it sided with Epic) pertains to Apple’s prohibition on developers from offering links that offer payments outside the App Store’s own billing systems. If developers are allowed to send such links, then they can bypass the hefty commission they have to pay Apple for all in-app purchases. The appeals court upheld the earlier ruling that Apple could no longer prohibit developers from adding such links.
In response, Epic CEO Tim Sweeney (whose account has a Blue Tick, by the way) took to Twitter to announce, “Though the court upheld the ruling that Apple’s restraints have “a substantial anticompetitive effect that harms consumers”, they found we didn’t prove our Sherman Act case.” “Fortunately, the court’s positive decision rejecting Apple’s anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We’re working on the next steps,” he wrote.
Fortunately, the court's positive decision rejecting Apple's anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We're working on next steps.
— Tim Sweeney (@TimSweeneyEpic) April 24, 2023
For those who missed it, the legal tussle between Epic and Apple began soon after the latter removed Fortnite from its App Store after Epic had introduced its own payment system into Fortnite. The iPhone maker maintained its harsh stance on apps and in-app purchases, prohibiting developers from circumventing the App Store’s billing system and positioning the App Store as the sole avenue of selling Phone apps to consumers. Epic, and others, have been critical of Apple’s App Store policies for a long time. In the 2021 ruling, the judge directed Apple to allow developers to direct users to alternative payment systems but did not recognize Apple’s running of the App Store as a monopoly. The App Store remains a vital source of profit for the company.