Apple scored a major victory over Epic Games, with an appeals court upholding the original decision in its entirety.
Epic Games intentionally broke the terms of Apple’s developer rules and then sued when Apple removed Fortnite from the App Store. In her initial decision, Judge Yvonne Gonzalez Rogers ruled in favor of Apple in nine out of ten counts. The point Epic won was Judge Rogers’ decision that Apple must allow developers to give users other options for payment outside of the App Store. This would effectively cut Apple out of any commission.
Epic appealed the decision, but the appeals court has upheld Judge Rogers’ ruling in its entirety, according to Bloomberg. The US Ninth Circuit Court of Appeals upheld all nine elements of Apple’s win but also upheld the one point in Epic’s favor, mandating that developers can direct users to outside payment methods.
Most significantly, the appeals court agreed with Judge Rogers that Apple is not a monopoly, a decision that will go a long way toward protecting Apple’s business. The judges seemed to largely accept Apple’s argument that its control of the App Store provides a layer of security that would not be possible with third-party stores.
“Apple makes clear that by improving security and privacy features, it is tapping into consumer demand and differentiating its products from those of its competitors — goals that are plainly procompetitive rationales,” the panel said.
Despite upholding the lower court’s decision, the panel of judges acknowledged there is still room for debate regarding online marketplaces and the companies that run them.
“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.”
Apple welcomed the victory but said it still reserved the right for further appeal.
“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 company said in an emailed statement to Bloomberg. “We respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review.
It’s hard to imagine what the company could gain by further appeal. Apple had already begun making changes in line with Judge Rogers’ ultimate decision, taking such steps even before she ruled. While it’s true that Apple’s new policies only currently apply to “reader apps,” such as streaming services, Apple is facing increased pressure internationally to crack open its walled garden. It’s highly unlikely Apple would prevail on the final point, regardless of how much it appeals, and tightening legislation will likely force the company to allow third-party payment options for other categories as well.
Ultimately, Apple should take the win and move on.
