Apple Inc. has run out of runway in one of the most consequential antitrust battles in the history of American technology. The U.S. Court of Appeals for the Ninth Circuit on Monday unanimously denied Apple’s petitions for rehearing and rehearing en banc in its long-running dispute with Epic Games, the maker of Fortnite. The ruling effectively cements a lower court’s anti-steering injunction that forces Apple to allow app developers to direct users to alternative payment methods outside the App Store — a structural change to Apple’s business model that the company has fought tooth and nail for nearly five years.
The denial was unequivocal. No judge on the panel requested a vote on rehearing en banc, according to the court’s order, as reported by 9to5Mac. That unanimity is significant. En banc rehearings — where the full bench of a circuit court reconsiders a panel’s decision — are rare to begin with, granted in roughly 1% to 2% of cases. But the fact that not a single judge even called for a vote signals that the court views the legal questions here as settled, at least at the appellate level.
This is a stinging defeat for Apple.
The dispute traces back to August 2020, when Epic Games deliberately violated Apple’s App Store guidelines by implementing a direct payment system inside Fortnite that bypassed Apple’s 30% commission. Apple promptly removed Fortnite from the App Store. Epic, clearly anticipating the move, filed a lawsuit within hours and launched a public relations campaign called “Free Fortnite” that included a parody of Apple’s iconic “1984” advertisement. The choreography was unmistakable: Epic had engineered a legal confrontation.
The original trial, presided over by U.S. District Judge Yvonne Gonzalez Rogers in the Northern District of California, produced a mixed verdict in September 2021. On nine of ten counts, Apple prevailed. The court found that Apple did not hold monopoly power in the relevant market, rejecting Epic’s broadest antitrust claims. But on one count — under California’s Unfair Competition Law — the judge ruled that Apple’s anti-steering provisions were anticompetitive. She issued an injunction requiring Apple to permit developers to include buttons, external links, or other calls to action directing users to purchasing mechanisms outside the App Store.
Apple appealed. So did Epic. The Ninth Circuit’s panel decision, handed down in April 2023, largely affirmed the district court. It upheld the finding that Apple was not a monopolist under federal antitrust law but also upheld the anti-steering injunction under California state law. The panel modified the injunction’s scope slightly but left its core intact. Both sides petitioned the U.S. Supreme Court, which declined to hear the case in January 2025, sending it back to the Ninth Circuit for further proceedings.
And now, with Monday’s denial of rehearing, Apple’s appellate options within the Ninth Circuit are exhausted.
The practical implications are enormous. Apple’s App Store generated an estimated $24.2 billion in revenue in 2025, according to estimates from Sensor Tower. The commission structure — typically 30% on in-app purchases for large developers, reduced to 15% for smaller ones — has been the economic engine powering Apple’s services division, which CEO Tim Cook has positioned as a critical growth vector as iPhone hardware sales mature. The anti-steering injunction doesn’t eliminate Apple’s ability to charge commissions, but it fundamentally weakens the company’s grip on the payment funnel. If developers can freely tell users to pay elsewhere, many will. And many users will follow.
Apple has already made partial concessions in response to regulatory and legal pressure worldwide. In the European Union, the Digital Markets Act forced Apple to allow alternative app stores and payment systems beginning in 2024, though Apple imposed a controversial “Core Technology Fee” that critics called a poison pill designed to discourage developers from using alternatives. In Japan, Apple agreed in 2021 to let apps link to external websites for purchases, a move that predated but foreshadowed the Ninth Circuit’s mandate. In South Korea, legislation required Apple and Google to permit third-party payment systems.
But the U.S. market is the big prize. It’s Apple’s largest single market by revenue, and the anti-steering injunction applies here with the full force of a federal court order.
Epic Games CEO Tim Sweeney has been vocal throughout the litigation, framing the fight as one about the fundamental openness of computing platforms. “This is about the freedom of all developers and all consumers,” Sweeney said in a 2021 statement following the original trial verdict. He has repeatedly argued that Apple’s control over iOS app distribution constitutes an illegitimate toll booth on digital commerce. Sweeney’s position has drawn both admirers and skeptics — admirers who see a principled stand against monopolistic gatekeeping, and skeptics who note that Epic, a company valued at roughly $32 billion, has its own financial incentives to avoid paying Apple’s cut.
The legal reasoning underpinning the injunction deserves close attention. Judge Gonzalez Rogers found that while Apple’s conduct didn’t rise to the level of a Sherman Act violation — the gold standard of federal antitrust — it did violate California’s Unfair Competition Law, which uses a broader balancing test. Under the UCL, a business practice can be deemed unfair if its harm to competition outweighs any procompetitive benefits. The court found that Apple’s anti-steering rules suppressed information that consumers needed to make informed purchasing decisions, and that this informational suppression harmed competition even if Apple’s overall market position didn’t constitute a monopoly in the traditional federal sense.
The Ninth Circuit agreed. And its refusal to rehear the case means this interpretation of California’s UCL now stands as binding precedent within the circuit, which covers nine western states including California — home to virtually every major technology company in the country.
That precedent could ripple outward. Other developers, emboldened by the Epic ruling, may bring their own UCL claims against platform operators. Google, which runs a similar commission structure in its Play Store, faces analogous legal exposure. In fact, Epic won a separate jury trial against Google in December 2023, with the jury finding that Google had maintained an illegal monopoly over Android app distribution. Judge James Donato subsequently ordered sweeping remedies, including requiring Google to allow third-party app stores on Android devices. Google has appealed.
The timing of the Ninth Circuit’s decision also intersects with a broader regulatory reckoning for Big Tech. The U.S. Department of Justice is pursuing a monopoly case against Google over its search dominance, with a remedy phase underway after Judge Amit Mehta ruled in August 2024 that Google had illegally maintained its search monopoly. The Federal Trade Commission has an active case against Meta. And the DOJ’s separate antitrust suit against Apple — filed in March 2024 — alleges that Apple has monopolized the smartphone market through a web of exclusionary practices, including its App Store policies. That case, United States v. Apple Inc., is still in its early stages, but the Epic precedent will almost certainly inform the government’s arguments.
Apple’s legal strategy going forward is constrained but not entirely foreclosed. The company could petition the Supreme Court again, though the high court already declined to take the case once. A second petition would need to identify a new or different legal question — perhaps arguing that the Ninth Circuit’s application of California’s UCL to app store policies creates a conflict with other circuits or raises unresolved constitutional issues. Legal experts consider this a long shot.
More likely, Apple will focus on compliance — or, more precisely, on the terms of compliance. The original injunction’s language gives Apple some room to implement the anti-steering mandate in ways that still favor its own payment system. Apple could, for example, allow external payment links but impose design restrictions, require prominent disclosures about the risks of paying outside the App Store, or limit the placement and formatting of external links. This kind of malicious compliance — technically following the court’s order while undermining its spirit — has been Apple’s playbook in other jurisdictions. In the EU, developers and regulators have accused Apple of doing exactly this with its Digital Markets Act implementation.
Judge Gonzalez Rogers has shown little patience for such tactics. In November 2021, when Apple initially sought to stay the injunction pending appeal, the judge expressed skepticism about Apple’s good faith. And the injunction itself includes provisions allowing the court to modify its terms if Apple’s implementation proves inadequate.
For developers, the ruling creates both opportunity and uncertainty. The ability to direct users to external payment options could dramatically reduce the effective commission rate developers pay Apple. A developer selling a $9.99 subscription, for example, currently nets roughly $7.00 after Apple’s 30% cut (or $8.50 under the reduced 15% rate for small businesses). If that developer can route even a fraction of subscribers to a direct payment system — using Stripe, for instance, which charges roughly 2.9% plus 30 cents per transaction — the economics shift dramatically. But developers also face practical challenges: building and maintaining their own payment infrastructure, handling customer support for transactions that occur outside Apple’s system, and managing the friction of redirecting users away from the familiar one-tap App Store purchase flow.
Spotify, which has been one of Apple’s most vocal critics, stands to benefit significantly. The streaming giant has long complained that Apple’s commission structure forces it to either raise prices for iOS subscribers or absorb a margin-crushing fee — all while competing against Apple Music, which pays no such commission. Spotify CEO Daniel Ek has called Apple’s practices “a tax on innovation.” With the anti-steering injunction in effect, Spotify can now direct its hundreds of millions of iOS users to sign up and pay through Spotify’s own website, bypassing Apple entirely.
Netflix already made this move years ago, removing in-app subscription purchases in 2018 and directing new users to its website. But Netflix had the brand power to absorb the friction. Smaller developers — the ones who arguably need relief the most — may find it harder to convince users to leave the App Store’s frictionless checkout experience.
Wall Street’s reaction to the Ninth Circuit’s denial has been muted so far, reflecting the fact that the market had largely priced in this outcome after the Supreme Court declined to hear the case. Apple’s stock dipped less than 1% in after-hours trading Monday. Analysts at Morgan Stanley and Goldman Sachs have previously estimated that the anti-steering injunction could reduce App Store revenue by 5% to 15% over time, depending on developer adoption and consumer behavior. That translates to roughly $1.2 billion to $3.6 billion in annual revenue at risk — material, but manageable for a company that generated over $390 billion in total revenue last fiscal year.
But the financial impact may be less significant than the strategic one. Apple has built its services business on the premise that controlling the payment layer gives it recurring, high-margin revenue from every transaction that flows through its platform. The anti-steering injunction doesn’t just threaten a revenue stream. It threatens a business model.
And it threatens a narrative. For years, Apple has argued that its closed system benefits consumers through security, privacy, and quality control. There’s truth in that argument — the App Store’s review process does catch malware and scams that plague more open platforms. But the Ninth Circuit’s ruling implicitly rejects the notion that consumer protection requires Apple to control the payment mechanism. Telling users about alternative payment options isn’t a security risk. It’s information.
The broader tech industry is watching closely. Microsoft, which operates the Xbox gaming platform with a similar commission structure, has been gradually opening its storefront and reducing fees in what appears to be a preemptive response to regulatory trends. Valve, which runs the dominant PC gaming storefront Steam, still charges a 30% commission but faces less legal pressure because PC users have always had the ability to install software from any source. The console makers — Sony, Nintendo, and Microsoft — maintain walled gardens of their own, but the legal and regulatory focus has so far concentrated on mobile platforms, where the smartphone is increasingly the primary computing device for billions of people.
Epic’s Sweeney has made clear that the Fortnite maker’s ambitions extend beyond its own games. Epic operates the Unreal Engine, one of the two dominant game development platforms, and the Epic Games Store, a PC storefront that charges a 12% commission — a direct challenge to Steam’s 30%. Sweeney has positioned Epic as a champion of developer rights, and the legal victories against both Apple and Google give that positioning considerable credibility. Whether Epic’s motives are altruistic or strategic is beside the point. The legal precedents are real.
So where does this leave Apple? In the near term, the company must comply with the anti-steering injunction and allow developers to include external payment links in their iOS apps. The implementation details will be contentious, and further court battles over compliance are virtually guaranteed. In the medium term, Apple faces the DOJ’s antitrust suit, which could impose far more sweeping remedies than the Epic injunction. And in the long term, Apple must reckon with the possibility that the 30% commission — the foundation of its services empire — is an artifact of a regulatory environment that no longer exists.
The App Store launched in 2008 with 500 apps. Today it hosts nearly two million. The 30% commission was established when Apple was building a marketplace from scratch, investing heavily in infrastructure, developer tools, and consumer trust. Eighteen years later, the App Store is the only way to distribute software to over a billion iPhone users. The question the courts, regulators, and lawmakers are now asking is whether a commission rate set when Apple was creating a market is still justified when Apple controls it.
Monday’s ruling doesn’t answer that question definitively. But it moves the answer closer to no.
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