They both lose!
If you’ve been following the Epic Games lawsuit launched against Apple, this is quite a day. Because the judge has made a ruling on the case. And it initially seems like a win for Epic, because the judge issued an injunction forcing Apple to allow developers to utilize links to outside payment methods on their apps. From the ruling:
Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them (“Apple”), are hereby permanently restrained and enjoined from prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
Ah, but that’s only half of it. See, Epic also alleged that Apple was a monopoly. And the court did not find in favor of that interpretation of the company.
Having defined the relevant market as digital mobile gaming transactions, the Court next
evaluated Apple’s conduct in that market. 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 court did find that Apple’s conduct was “anticompetitive,” however. On the other hand, they granted Apple’s counter-suit in regards to Epic’s breach of contract. The court ordered Epic to pay 30% of the $12,167,719 (about $3.6 million) they collected from Fortnite users through the app via direct payment between August and October 2020, as well as further damages.
But this isn’t the end of this. Both parties can drag this out into higher courts if they’re so inclined. Not to mention the proposed legislation that would keep Apple from continuing in their walled garden approach. There’s also the fact that a law was recently passed in South Korea that put much the same restriction on major platforms.
Both companies have issued statements on the matter. Apple’s comes via Mark Gurman on Twitter:
Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law. 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. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.
Tim Sweeney distributed Epic’s statement via his own Twitter account.
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.
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.
Thanks to everyone who put so much time and effort into the battle over fair competition on digital platforms, and thanks especially to the court for managing a very complex case on a speedy timeline. We will fight on.
But you may remember several paragraphs back that developers are now allowed to give links to outside payment options. They’re not allowed to provide those options in-app directly; that’s what Sweeney is getting at in his statement. Basically, the end user would still have to leave the app to complete a transaction, which is not the result that Epic, and other devs, wanted.
Source: IGN
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