Apple has triumphed in its ongoing legal battle with Epic Games, as the US Ninth Circuit Court of Appeals upheld the iPhone maker’s App Store policies in an antitrust challenge. This verdict supports the lower-court judge’s 2021 decision, which predominantly dismissed claims made by Epic Games, the creator of Fortnite, that Apple’s online marketplace policies violated federal law by prohibiting third-party app marketplaces on its operating system.
While the appeals panel confirmed the judge’s ruling in favour of Epic Games on California state law claims, Apple has been proactively making changes to the App Store’s operations to address developers’ concerns since the lawsuit was filed in 2020. The conflict began when Apple removed Fortnite from the App Store after Epic Games implemented a workaround to bypass paying a 30% fee on customers’ in-app purchases.
The court’s decision solidifies the likelihood that Apple’s control over the App Store and its associated fees will not undergo significant changes as a result of Epic Games’ legal challenge. Apple has hailed the outcome as a victory, with a company spokesperson stating, “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 be a crucial profit source for Apple, contributing to its $78.1 billion in services revenue in fiscal 2022.
Despite losing the majority of the claims, Epic Games and other developers had hoped that the ruling could establish a precedent for future antitrust claims, ultimately requiring Apple to open iOS devices to third-party app stores and payment systems. The court did not overturn the California law-related decision that compels Apple to allow developers to insert links within their apps, enabling users to make purchases outside the App Store.
Epic Games’s founder and CEO Tim Sweeney’s delivered a statement on twitter, saying:
“Apple prevailed at the 9th Circuit Court,” Sweeney wrote. “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.”
Apple is contemplating further action, including a potential appeal to the Supreme Court, as this is the sole claim the company believes was not decided in its favour.