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Apple v Epic: Apple Scores a Victory (Mostly)

Judge Yvonne Gonzalez Rogers has ruled in the landmark case between Apple and Epic, and largely ruled in Apple’s favor....
Apple v Epic: Apple Scores a Victory (Mostly)
Written by Matt Milano
  • Judge Yvonne Gonzalez Rogers has ruled in the landmark case between Apple and Epic, and largely ruled in Apple’s favor.

    Epic, the maker of Fortnite, sued Apple over its App Store policies and sought a number of changes to Apple’s business model. The gamemaker objected to the commission Apple charges, being forced to use the App Store, not being able to use its own payment system — pretty much the entire app ecosystem Apple created and it benefited from.

    While there was some merit to Epic’s complaints, the company took a disingenuous approach to making its case. Ut intentionally broke the terms of Apple’s developer rules, waited for Apple to kick Fortnite off the App Store and then sued Apple. The judge threw out Epic’s initial injunction request, saying the company couldn’t request relief from a situation it created itself. In contrast, had the company sued Apple while abiding by its developer agreement, it would have been entitled to damages.

    As it turns out, however, Epic scored only a minor victory, with Apple clearly coming out on top. Judge Yvonne Gonzalez Rogers ruled that Apple must allow developers to point their users to their own payment systems, effectively allowing them to bypass Apple’s commission. Judge Rogers did not, however, force Apple to allow alternate app stores, nor did she reduce the commission Apple charges.

    Judge Rogers also awarded Apple damages “equal to 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment.”

    Judge Rogers, while agreeing that Apple’s attempts to force developers to use its own payment system were anti-competitive, shot down Epic’s claims that Apple was a monopoly.

    Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist.

    The ruling is largely a big win for Apple. Even Rogers’ decision regarding allowing developers to direct users to their own payments systems is relatively similar to Apple’s decision to allow ‘reader’ apps to do the same thing.

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