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Apple emerges victorious in antitrust appeal against Epic Games

But the ruling also opens the door for developers to include links in apps and side-step App Store fees
Apple emerges victorious in antitrust appeal against Epic Games

Apple has won its appeal in the antitrust claim filed by Epic Games, with the court finding in the tech giant’s favour in nine out of ten claims.

Despite these successes, The US Ninth Circuit Court of Appeals found that Apple violated California’s anti-steering laws by blocking attempts by developers to take payments through third-party platforms. As a result, while Apple are celebrating the direct 'win' against Epic, the repercussions of the case have given developers a way to circumvent the App Store (and Apple's 30% fees) for the first time.

The case was first launched in 2020, when Epic attempted to dodge the 30% commission charged by Apple and Google for in-app purchases, resulting in both storefronts removing Epic’s global hit Fortnite.

Today's ruling is perhaps best summed up by Social First founder and CEO Kim Soares who commented, “This is huge. Apple won 9 out of 10 claims in appeals court but the one that they lost forces them to allow app developers include links in their apps that lead to outside store / payment.

“So a developer can sell IAP's on their own website and get all the profit instead of paying Apple 30% and have a link to that website directly in the app. I can see developers steering users to their own store page by giving, say 10% discount on all purchases. That would still leave developer with 90% of the revenue instead of 70% and customers get a discount at the same time.”

Winning the battle, losing the war?

While the court finding in Apple’s favour is likely to come as good news, the fact that it sided with Epic Games in perhaps the single most crucial aspect of the case has greater implications for the wider industry. More and more companies are growing dissatisfied with the lack of alternatives, and the high commission fees owed to Apple and Google for purchases made via their storefronts.

Competitors attempting to shake up the system are taking advantage of this dissatisfaction with the launch of alternative storefronts, while legislators worldwide are increasingly requiring both companies to open up their platforms to alternatives. As such, this ruling could act as a precedent, and open the door for further markets to take action against Apple.

However, for now at least, Apple remains resolute that this case is 'a win', with a spokesperson saying in response to the ruling, "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," said an Apple spokesperson in response to the ruling.

Speaking to CNBC, a spokesperson for the company said “Today’s decision reaffirms Apple’s resounding victory in this case, with nine of 10 claims having been decided in Apple’s favour. 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 company also stated that it’s considering further review of the law violation, indicating that it may attempt to take further action in the future.

Epic Games CEO Tim Sweeney took to Twitter to discuss the outcome of the case, stating: "Apple prevailed at the 9th Circuit Court. 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 next steps."

Last month, Sweeney indicated that the Epic Games Store may soon be making the jump to mobile.