A judge presiding over a high-profile case filed by Fortnite developer Epic Games against Apple found the iPhone company engaged in illegal “anticompetitive conduct” under California law but stopped short of labeling it an “illegal monopolist.”
Judge Yvonne Gonzalez Rogers ruled Friday that while the court “does not find that it is impossible,” referring to Epic’s allegations, the company failed to demonstrate that Apple is “an illegal monopolist,” noting that “success is not illegal.”
“Nonetheless, the trial did show that Apple is engaging in anticompetitive conduct under California’s competition laws,” the judge said in the decision, which was made in the District Court for the Northern District of California.
APPLE AND EPIC GAMES FACE OFF IN COURT WITH POSSIBLE ANTITRUST RAMIFICATIONS
JUDGE YVONNE GONZALEZ ROGERS laid it down! ??? pic.twitter.com/361kXIObck
— Andru Edwards (@AndruEdwards) September 10, 2021
The lawsuit relates directly to Apple’s so-called monopoly on iOS apps, as alleged by Epic in its filings. In August 2020, Epic decided to allow Fortnite players to save money by purchasing V-Bucks, the in-game currency, through Epic. By buying directly from Epic, the Fortnite creator cut out the middleman of Apple, which takes a 30% fee of any transactions completed in the iOS marketplace. The video game company was subsequently booted from Apple’s service for breaching its terms of service.
Still, Gonzalez Rogers’s Friday decision issued a permanent injunction against Apple, forcing it to allow developers to direct users to other forms of payment that would circumvent Apple’s fee. The judge described the injunction as a “measured remedy” to increase competition and consumer choice while allowing most of Apple’s App Store policies, such as the collection of commission fees and maintaining the App Store as the only way to download new applications on iPhones and iPads, to remain in place.
Epic, which is the developer of games such as Fortnite, Infinity Blade, and Rocket League, will also have to pay Apple an amount equal to 3% of the estimated $12 million in revenue Epic Games earned from users in the Fortnite app through direct payments.
In response to the ruling, Apple released a statement to Reuters, saying, “As the Court recognized ‘success is not illegal.'”
“Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world,” the company said, adding, “We remain committed to ensuring the App Store is a safe and trusted marketplace.”
Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. https://t.co/cGTBxThnsP
— Tim Sweeney (@TimSweeneyEpic) September 10, 2021
The CEO of Epic, Tim Sweeney, tweeted that the ruling “isn’t a win for developers or for consumers.”
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“Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers,” Sweeney said, adding that Fortnite will return to the iOS App Store “when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.”
The ruling partially supporting Epic’s characterization of Apple as “anticompetitive” could have future implications on anticompetitive claims in the digital market, as Google also removed Epic from its Android store for similar reasons in August 2020.
